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If the major DRAM manufacturers fixed prices from 1998 to 2002, they're about to pay for it

A saga that has been cumulating for the last eight years is about to take another major step.  Seven of the major eight DRAM manufacturers will face a major antitrust complaint filing tomorrow lead by Attorney General Bill Lockyer.  Lockyer's filing for the State of California will be followed by additional suits in thirty-three more states shortly after.

The complaint claims that between 1998 and 2002 seven manufactures colluded to "fix DRAM chip prices, artificially restrain supply, allocate among themselves the production of DRAM chips and markets for the chips, and rig bids for DRAM chip contracts."  When the complaints are filed tomorrow, July 14, the following companies will be named:

  • Elpida Memory (Japan)
  • Hynix Semiconductor (South Korea)
  • Infineon Technologies AG (Germany)
  • Micron Technology (USA)
  • Mosel Vitelic (Taiwan)
  • Nanya Technology Corp. (Taiwan)
  • NEC Electronics America (USA)

Interestingly enough, the world's largest DRAM manufacturer, Samsung, is not listed in the claim.  Samsung had a DRAM market share of roughly 30% at the time and has been found guilty of price fixing during that same period.  In March of 2004, the FTC dropped an antitrust case against Rambus, to which Rambus turned around and sued Infineon, Hynix and Micron for artificially decreasing the price of DRAM to hurt the proliferation of RDRAM. Samsung, Rambus' major producer of RDRAM at the time, was also absent from these accusations.

The alleged collusion hurt the bottom line of several PC manufacturers at the time.  The suit to be filed by Lockyer names several manufactures, including Apple, Compaq, Dell, Gateway and IBM.

An excerpt from one of the claims reads "The manufacturers did not limit this pricing coordination to isolated or occasional conversations. On the contrary, during a roughly four-year period, there were frequent pricing communications among the conspiring manufacturers, exchanges that intensified in the days immediately preceding the dates on which they submitted bids to supply DRAM to the (computer makers), their largest and most important customers."

The industry certainly hasn't been without its share of shakeups.  In March of 2006, four Hynix executives were found guilty of price fixing, and are currently serving jail time.  Three Samsung executives were also found guilty, and Elpida was fined for price fixing too.

The suits seek retribution for the three year price fixing period, and will also impose penalties if the defendants are found guilty.

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RE: An oxymoron by any other name...
By armagedon on 7/13/2006 7:36:16 PM , Rating: 2
what? Oil companies do it all the time ! mostly in one direction though.

RE: An oxymoron by any other name...
By TomZ on 7/13/2006 8:17:38 PM , Rating: 2
what? Oil companies do it all the time ! mostly in one direction though.

If you can prove it, then we've got a case!

The article mentions a bunch of communications about pricing fixing between DRAM manufacturers that, if correct, is simply outrageous and in total disregard to anti-trust laws.

RE: An oxymoron by any other name...
By patentman on 7/13/2006 8:24:29 PM , Rating: 2
Most of the price fixing in oil occurs as a result of OPEC, which is a self admitted cartel that excercises monopoly power over the oil market. It wouldn't matter if we sued the members of OPEC, however, because a lot of them are governments of foreign nations, and thus not subject to our laws. Moreover, its in our best interest not to sue them, considering how much people whine in this country over $3 gas.....

RE: An oxymoron by any other name...
By Fenixgoon on 7/13/2006 10:23:50 PM , Rating: 2
FUD... canada is our #1 importer for petroleum-based products, #2 for strictly oil.

canada has more oil reserves than saudi arabia - tar sands ftw.

By blueflash2o on 7/17/2006 8:27:55 PM , Rating: 2
and the us has a bigger one than canada and if im not mistaken the us has the biggest reserve in the world

RE: An oxymoron by any other name...
By Calin on 7/16/2006 7:00:04 AM , Rating: 2
OPEC is not an monopoly - there are some big exporters of oil that are not in OPEC. The sad thing is the world is so dependent on oil (crude and refined), that even a smaller exporter can cause shakeups in the market. A 5% reduction in overall production will have important effects on the price - one of the reasons being that the current use is close to the maximum production possible (there is little unused capacity in both production and refining)

By patentman on 7/17/2006 12:42:00 PM , Rating: 2
I didn;t say they were a monopoly, I said they were are cartel that exercises monopoly power. In antitrust law, the law is concerned with not only true monopolies, but also markets in which one or a few participants exercise monopoly power.

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