Samsung to Pay U.S. States $90M in DRAM Case

Samsung Electronics, the world’s largest dynamic RAM (DRAM) maker, agreed to pay US$90 million in a DRAM price-fixing suit raised by a group of U.S. state governments, the first company named in the suit to reach such an accord.

Samsung also agreed to assist the states in resolving price-fixing charges against other defendants named in the suit, the New York State attorney general’s office said in a statement on Tuesday. The agreement ends the case against Samsung.

The lawsuit was filed last July by New York and 40 other U.S. states in a joint antitrust effort against several DRAM makers over alleged price-fixing, adding to industry woes amid an ongoing federal investigation that has already led to $731 million in fines.

They alleged the companies violated antitrust laws and harmed consumers by conspiring to fix prices through artificial supply restraints, dividing markets among themselves and rigging bids on DRAM contracts during a four-year period between 1998 and 2002.

The price-fixing scheme caused computer makers such as Apple and Dell to pay more for DRAM than they would have in a competitive market, the suit alleged, and the costs were then passed on to consumers.

The Samsung settlement will be used to benefit victims of high DRAM prices, with $80 million going to consumers and other victims, and $10 million being paid out to state and local governments.

New York’s attorney general said the state’s specific share of the settlement will be determined in the future.

Samsung’s Seoul office declined to comment on the settlement, saying its U.S. subsidiary is handling all issues regarding the case.

Hynix Semiconductor, another company named in the suit, said it is too early to tell what impact the Samsung deal may have on the case.

“We’re still looking into the matter. We haven’t decided anything yet,” said Kim Ah-Young, a Hynix representative.

The accord with Samsung is subject to approval by the federal court in San Francisco. The litigation will continue against other DRAM makers named in the suit, including U.S.-based Micron Technology, Infineon Technologies of Germany, South Korea’s Hynix, Japan’s Elpida Memory and NEC Electronics America, Taiwan’s Mosel Vitelic and Nanya Technology as well as their U.S. subsidiaries.

The case by the states started after the U.S. Department of Justice (DoJ) investigation had already led to several guilty pleas, which resulted in millions of dollars in fines and jail time for a dozen individuals from four companies.

In late 2005, Samsung was ordered to pay a $300 million criminal fine in the DoJ case, while South Korean rival Hynix Semiconductor agreed to pay $185 million. Infineon Technologies was first to pay a fine, of $160 million, in late 2004. Earlier last year, Japan’s Elpida Memory agreed to plead guilty and pay an $84 million fine.

-Dan Nystedt, IDG News Service (Taipei Bureau)

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