Thursday, September 7, 2006

The DRAM Cartel Get Their Due

From 1992 to 2002, the US Justice Department investigated four companies that manufactured dynamic-access memory (DRAM) chips. These companies were accused of price-fixing the DRAM chips. The companies are:

  • Samsung Electronics Co, South Korea

  • Infineon Technologies, Germany

  • Elpida Memory Inc, Japan

  • Hynix Semiconductor Inc, South Korea

In a nutshell, price fixing is when business competitors who make the same product make an agreement regarding pricing. Usually, the cartel agrees to set a high price so all the companies can collect a high profit margin. (For a more detailed explanation of price fixing, view the Wikipedia explanation). The problem with price fixing is it is illegal in most countries.

Over the past year in various court cases, all four companies pled guilty to felony price fixing charges brought by the Justice Department and had to pay hundreds of millions of dollars in fines. In some cases, executives also had to serve jail time.

Now that the criminal trials are over, the civil trials have begun. Sun Microsystems, based in Santa Clara, California, and Unisys, based in Blue Bell, Pennsylvania, have filed a civil suit against Hynix Semiconductor Inc. Sun and Unisys are seeking damages related into the federal probe into price-fixing chips. (JRL - more than likely, the damages are for lost sales on their servers using DRAM) Hynix is seeking to settle out-of-court.

Source: Associated Press. Sun Microsystems, Unisys sue Hynix Semiconductor in US court, Hynix says. Associated Press, 06 September 2006. Retrieved 07 September 2006 from

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