Samsung Exec Pleads Guilty to DRAM Price Fixing

A top executive from Samsung Electronics will serve 10 months in prison and pay a US$250,000 fine for his role in a global conspiracy to fix dynamic RAM (DRAM) prices, the U.S. Department of Justice (DoJ) announced.

Young Hwan Park, currently president of Samsung’s U.S. subsidiary, Samsung Semiconductor, agreed Thursday to plead guilty to a violation of the U.S. Sherman Antitrust Act for conspiring with other companies to fix DRAM prices, according to court records.

Park, formerly vice president of sales at Samsung, is the fifth Samsung executive to agree to prison sentences in the DoJ’s ongoing price-fixing investigation. Samsung, based in South Korea, is the world’s largest manufacturer of DRAM, a memory chip commonly used in PCs and several other electronic devices.

Since December 2003, the DoJ has charged four DRAM vendors and 18 people in the price-fixing investigation.

People who “choose to engage in price fixing are on notice of the consequences of their illegal actions—criminal fines and prison time,” said Thomas O. Barnett, assistant attorney general in charge of the DoJ’s Antitrust Division, in a statement.

Park conspired with employees from other memory makers to fix the prices of DRAM sold to original equipment manufacturers from April 2001 to June 2002, according to a felony court document filed Thursday in U.S. District Court for the Northern District of California in San Francisco. Computer makers affected by the price fixing included Dell, Hewlett-Packard, Apple Computer and Gateway, the DoJ said.

Park participated in meetings with other DRAM makers where the prices of DRAM were discussed, and he committed to charging the agreed prices, the DoJ said.

Samsung pleaded guilty to the price-fixing conspiracy and was sentenced to pay a $300 million fine in November 2005. Hynix Semiconductor, the world’s second-largest DRAM manufacturer, pleaded guilty and was sentenced to pay a $185 million fine in May 2005.

In January, Japanese manufacturer Elpida Memory agreed to plead guilty and pay an $84 million fine. In October 2004, German manufacturer Infineon Technologies pleaded guilty and was sentenced to pay a $160 million fine.

-Grant Gross, IDG News Service (Washington Bureau)