EC fines DRAM chipmakers $404M over price fixing

Antitrust regulators reduced the fines since the nine DRAM companies admitted participating in a cartel

European antitrust regulators fined nine semiconductor manufacturers more than €331 million ($404 million) on Wednesday following a years-long investigation into price fixing in the market for DRAM memory chips.

The European Commission said all of the companies submitted settlements admitting their liability for infringement. The companies fined are Samsung Electronics, Infineon, Hynix Semiconductor, Elpida Memory, NEC Electronics, Hitachi, Toshiba, Mitsubishi Electric, and Nanya Technology.

[ Stay ahead of the key tech business news with InfoWorld's Today's Headlines: First Look newsletter. | Access InfoWorld from your iPhone or other mobile device at infoworldmobile.com. | Read Bill Snyder's Tech's Bottom Line blog for what the key business trends mean to you. ]

A tenth company, Micron, escaped a fine since it told the Commission about the cartel in 2002. Four of the companies -- Infineon, Hynix, Samsung, Elpida and NEC -- applied for leniency, which reduced their fine. All of the companies received a 10 percent reduction for settling the case.

Joaquín Almunia, vice president of competition policy for the Commission, sought to allay concerns that the companies' settlement with the Commission diluted the effects of their actions.

"You may think that to use the word 'settlement' next to the word 'cartel' sounds quite strange," Almunia said. "So let me explain right away that we are not compromising on cartels, with or without a settlement. A cartel is the worst violation of competition rules since its object is to collude against the interests of other companies and of consumers."

It the first time the Commission used a settlement procedure put in place in 2008. The Commission says the procedure allows it to speed up investigations if companies acknowledge a violation. Resources can then be moved to investigate other suspected cartels, Alumunia said.

The collective fine amounts to €331,273,800. Samsung was fined the most, at €145.7 million, followed by Infineon at €56.7 million and Hynix Semiconductor at €51.5 million.

The cartel operated between July 1, 1998, and June 15, 2002, and "involved a network of contacts and sharing of secret information, mostly on a bilateral basis, through which they coordinated the price levels and quotations for DRAMs," the Commission said in a statement.

NEC said its €10.3 million fine would not affect its May 12 financial forecast covering its fiscal 2010 results. Infineon, which must pay €56.7 million, said it had no comment. Other companies contacted did not have an immediate comment.

U.S. regulators fined several companies for DRAM price fixing in 2004 and 2005. Samsung Electronics pleaded guilty and was fined $300 million for conspiracy to fix prices in the DRAM market, according to the U.S. Department of Justice.

Hynix also pleaded guilty and was ordered to pay $185 million in May 2005. Infineon was fined $160 million. Four Infineon executives also pleaded guilty to the price-fixing conspiracy, serving prison terms of between four and six months and paying a $250,000 fine.

Recommended
Join the discussion
Be the first to comment on this article. Our Commenting Policies