Print 51 comment(s) - last by TIG.. on Jul 18 at 9:03 PM

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 masher2 on 7/17/2006 1:12:52 PM , Rating: 2
> " Under the Sherman act, price fixing AND conspiracy to fix prices is per se illegal."

While correct, you miss a critical point. A company cannot sue under the Sherman Act; it does so under the Clayton Act (or Robinson-Patman)...and the plaintiff must show cause, not a simple per se violation.

So while I suppose its technically true that a company could conspire to both raise and lower prices at the same time on the same product, it can only physically do one or the other.

So at least one of the aforementioned cases is nothing but hot air. Both cannot possibly be valid complaints.

RE: An oxymoron by any other name...
By kondor999 on 7/17/06, Rating: -1
RE: An oxymoron by any other name...
By TomZ on 7/17/2006 4:14:09 PM , Rating: 3
OK, that's pretty obvious. Why are we arguing about something so petty? I would think the main concern is whether these manufacturers actually conspired or not.

You made a relevant observation, then completely ignored it yourself. What's up with that?

Also, what's up with your facination with masher2? I've read a few of your comments of late, and you seem to be some kind of "stalker" trying to take him out?

RE: An oxymoron by any other name...
By masher2 on 7/17/2006 4:18:19 PM , Rating: 2
Sorry TomZ, I didn't see your reply before I posted my largely redundant version.

RE: An oxymoron by any other name...
By TomZ on 7/17/2006 4:37:08 PM , Rating: 2
No, your reply doesn't seem redundant to me at all.

By masher2 on 7/17/2006 4:17:03 PM , Rating: 3
> "[Both cannot possibly be valid complaints. ]
OK, that's pretty obvious...

If you read the thread, you'll see that it is not obvious to many of the posters here.

> "Why are we arguing about something so petty? I would think the main concern is whether these manufacturers actually conspired or not"

Having so easily grasped my earlier point, I would think you would see its larger relevance. At least one of these two cases is stuff and nonsense...might they both be? We've created a culture in which a manufacturer who charges more than his competitors is automatically accused of gouging, one who charges less is accused of dumping to destroy the competition...and one who charges the same price as colluding to fix prices.

Maybe these companies *are* guilty. But given the number of times SAGs have cried wolf in the past (not to mention Rambus's own transgressions here), I'll wait a bit before I pass judgement.

> "Of course, some people are too busy quoting legal minutiae to notice the overall thrust of things...You wouldn't know anyone like that, would you?"

No, but I know at least one person too busy in personal attacks to contribute anything substantive to any of the threads here.

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