Samsung execs plead guilty to DRAM price fixing

Three Samsung executives plead guilty to DRAM price-fixing charges, face fines and jail time.
  • (IDG News Service)
  • — 23 March, 2006 07:59

Three executives from Samsung Electronics Co., the largest manufacturer of DRAM (dynamic random access memory), have agreed to plead guilty and serve jail time for participating in a worldwide conspiracy to fix DRAM prices, the U.S. Department of Justice (DOJ) announced Wednesday.

Sun Woo Lee, Samsung's senior manager of DRAM sales, agreed to a sentence of eight months in U.S. prison. Yeongho Kang, associate director of DRAM Marketing, for Samsung's U.S. subsidiary, and Young Woo Lee, sales director for Samsung's German subsidiary, both agreed to serve seven months, the DOJ said.

The three also agreed to each pay a US$250,000 fine and cooperate with the DOJ's ongoing DRAM investigation. The South Korean executives each face one felony count for violating the U.S. Sherman Antitrust Act.

"True deterrence occurs when guilty individuals serve jail terms, and not just when corporations pay criminal fines," U.S. Attorney General Alberto Gonzales said in a statement. "These pleas should send a clear message that we will hold accountable all conspirators, whether domestic or foreign, that harm American consumers through their illegal conduct."

The pleas and sentences are subject to the approval by the U.S. District Court in San Francisco.

DRAM is the most commonly used semiconductor memory product, and is used in PCs, laptops, servers, printers, hard disk drives, mobile phones, digital cameras, game consoles, and other devices. There were about US$7.7 billion in DRAM sales in the U.S. in 2004, the DOJ said.

Between April 1999 and June 2002, the three Samsung executives conspired with employees of other DRAM makers to fix prices, according to the charges filed Wednesday. The conspiracy affected sales to several U.S. computer makers, including Dell, Hewlett-Packard, IBM, and Apple Computer.

Including Wednesday's charges, the DOJ has charged four companies and 12 individuals and assessed fines of more than US$731 million in a wide-ranging DRAM price-fixing investigation. The fines add up to the second largest total ever collected by the DOJ in a single price-fixing investigation.

The first charges in the investigation came in December 2003, and earlier this month, four executives from Hynix Semiconductor Inc. agreed to plead guilty.

Samsung was ordered in November 2005 to pay a US$300 million criminal fine. Hynix, the world's second-largest DRAM manufacturer, was ordered in May 2005 to pay US$185 million. Elpida Memory of Japan agreed in January to pay US$84 million. And Infineon of Germany agreed in October 2004 to pay US$160 million.

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Grant Gross

IDG News Service
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