SAN JOSE, Calif. As expected, South Korea's Hynix Semiconductor Inc. has plead guilty to price fixing in the DRAM industry and will pay a $185 million fine, according to the Associated Press on Thursday (April 21).
In a plea agreement filed in U.S. District Court in San Francisco, "Hynix acknowledged conspiring with other companies to fix prices of widely used computer memory products between April 1999 and June 2002," according to the report.
The plea had been expected. As reported in March, Hynix (Seoul) set aside 347 billion won ($338.7 million) in provisions related to the ongoing price-fixing investigation in the DRAM industry, according to a report from the JoongAng Daily in South Korea.
The amount settled with U.S. government appears to be much less. Hynix apparently disclosed the original amount in footnotes on an audited report of its 2004 results, according to the report. The company joins Samsung Electronics Co. Ltd. and Infineon Technologies AG in setting aside reserves in the case.
Back in 2002, Hynix, Infineon, Micron, Samsung and other memory makers confirmed that the U.S. Justice Department undertook an industry-wide investigation into alleged price fixing practices for DRAMs.
The investigation first centered around Micron Technology Inc. In 2003, Alfred Censullo, who was responsible for Micron's sales efforts in the upstate New York region, "was charged with obstructing justice by altering and concealing documents that contained competitor pricing information," according to a report. Censullo, one of 50 regional sales managers at Micron, could face up to 10 years in prison and a $250,000 fine, according to the report. Micron has accepted Censullo's resignation (see Dec. 17, 2003 story).
In December of 2004, four executives of German semiconductor maker Infineon agreed to plead guilty to participating in a conspiracy to fix DRAM prices. According to the one-count felony charge filed in U.S. District Court in San Francisco, Heinrich Florian, Gunter Hefner, Peter Schaefer and T. Rudd Corwin were found guilty of conspiring to fix DRAM chip prices between 1999 and 2002. Except for Corwin, a U.S. citizen, the executives are all German citizens.
Each has agreed to pay a $250,000 criminal fine and serve prison terms ranging from four to six months. In addition, the executives agreed to assist an ongoing government probe into possible price fixing in the DRAM industry.
The pleas come two months after Munich-based Infineon agreed to plead guilty to price-fixing charges in the DRAM industry and pay a $160 million fine, the third largest in antitrust history (see Sept. 15, 2004 story).
Then, with little fanfare, Samsung said that it has set aside a $100 million provision against a DRAM price fixing scheme that has rocked the industry (see Dec. 30, 2004 story).