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Samsung execs plead guilty in DRAM probe

Posted: 24 Mar 2006     Print Version  Bookmark and Share

Keywords:Dylan McGrath  Samsung Electronics  DRAM 

Three Samsung Electronics Co. Ltd. executives have agreed to plead guilty and to serve jail time in the United States in conjunction with an alleged global conspiracy to fix DRAM prices, the Justice Department announced on March 22. The executives have each agreed to serve up to eight months in jail each and pay a fine of $250,000.

Sun Woo Lee, senior manager of DRAM sales; Yeongho Kang, associate director of DRAM marketing for Samsung's U.S. subsidiary; and Young Woo Lee, sales director for Samsung's German subsidiary also agreed to cooperate in the department's ongoing investigation of the DRAM industry. The executives have agreed not to contest U.S. jurisdiction, meaning extradition will not be required, the Justice Department said.

The three Samsung executives entered guilty pleas to conspiring with unnamed employees from other memory makers to fix the prices of DRAM at various times from April 1, 1999 to June 15, 2002. According to the Justice Department, the conspiracy directly affected sales to U.S. computer makers Dell, Hewlett-Packard, Compaq Computer, IBM, Apple Computer and Gateway.

"These are the first executives from Samsung to plead guilty to fixing prices in what is still an active investigation into antitrust violations in the DRAM industry," Thomas Barnett, assistant attorney general in charge of the Justice Department's antitrust division, said in a statement. "We will continue our efforts to bring to justice other domestic and foreign-based executives who were involved with fixing DRAM prices."

According to the department, the Rs.3,234.68 crore ($731 million) in fines is the second largest amount of ever collected by the department from a single price-fixing conspiracy. In 1999, the department levied fines of Rs.3,429.38 crore ($775 million) against two companies in connection with a vitamin industry price-fixing investigation.

The United States has been investigating for two years alleged price fixing among DRAM manufacturers between 1999 and 2003. Four companies and 12 individuals have so far been charged, resulting in fines totalling more than Rs.3,234.68 crore ($731 million). Samsung pled guilty to federal price-fixing charges and agreed to pay a Rs.1,327.50 crore ($300 million) fine last October.

Three other companies have also pled guilty to price-fixing charges and agreed to pay large fines. Hynix Semiconductor pleaded guilty in April 2005 and agreed to a Rs.818.63 crore ($185 million) fine. Earlier this month, four Hynix executives agreed to serve jail terms of five to eight months and pay $250,000 each in connection with the probe.

Infineon Technologies AG agreed in September 2004 to pay a Rs.708 crore ($160 million) while four of its executives served jail terms ranging from four to six months and each paid a $250,000 after pleading guilty to involvement in the price-fixing conspiracy. A Micron Technology executive pled guilty to obstruction of justice in connection with the probe in December 2003. That executive resigned, and Micron has said it is cooperating with the investigation. In January, Elpida Memory agreed to plead guilty and pay an Rs.371.70 crore ($84 million) fine.

- Dylan McGrath
EE Times

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