Regulatory Investigation into LCD Market Expands

An investigation into possible anticompetitive behavior in the flat-panel display market widened Tuesday, with four more big vendors saying they had been contacted by investigators.

Samsung Electronics said it was served with subpoenas by regulators in the United States, South Korea and Japan, while Sharp and Taiwan’s AU Optronics were contacted by the Japan Fair Trade Commission and the U.S. Department of Justice (DoJ), they said. Taiwan’s Chi Mei Optoelectronics said a subsidiary in the United States was also contacted by the DoJ.

The investigation came to light Monday when LG.Philips LCD revealed that it had been subpoenaed by regulators in the United States, South Korea and Japan.

The probe centers on thin-film transistor (TFT) LCDs, according to Samsung. They are used in a wide range of electronics products including flat-panel televisions and computer monitors, laptop computers, cell phones and digital music players. The three companies being investigated are among the largest manufacturers of such displays.

The investigation comes on the heels of anticompetition probes in the dynamic RAM (DRAM) and static RAM (SRAM) markets. The DRAM investigation focused on price fixing, which is when vendors cooperate to set prices artificially.

Sharp spokeswoman Miyuki Nakayama said the company was surprised to have received the summons. Sharp has a policy of “fair and ethical management,” she said. Cho Sung In, a spokeswoman for Samsung in Seoul, said: “Samsung Electronics is strongly committed to fair competition and ethical practices and forbids anticompetitive behavior.”

Among other LCD manufacturers, Sony said its joint venture with Samsung, S-LCD, had not been contacted by the investigators.

Shares in LG.Philips dropped 4 percent Tuesday, while Samsung’s closed down two-thirds of a percent. The general market, as measured by the Kospi index, fell 1 percent. Sharp waited until after the market had closed to announce it had been contacted. Its shares rose 2 percent Tuesday.

In the DRAM investigation, Market leaders Samsung and Hynix Semiconductor pleaded guilty in 2005 to price fixing and received fines of US$300 million and $185 million, respectively. Japan’s Elpida Memory had to pay $84 million, and Germany’s Infineon Technologies paid a $160 million fine.

In October, several manufacturers of SRAM chips said they had been subpoenaed by the U.S. Justice Department, although they did not disclose the nature of the DoJ’s requests. The companies were Cypress Semiconductor and the U.S. units of Mitsubishi Electric, Samsung Electronics, Sony and Toshiba.

-Martyn Williams, IDG News Service (Tokyo Bureau)

Related Links:

• LG.Philips Subpoenaed in LCD Competition Probe

• Samsung Exec Pleads Guilty in DRAM Case

• Ex-Elpida Exec Pleads Guilty to DRAM Price Fixing

Check out our CIO News Alerts and Tech Informer pages for more updated news coverage.