Grant Gross
Senior Writer

Samsung execs plead guilty to DRAM price fixing

news
Mar 22, 20062 mins

The three Samsung executives conspired with other DRAM makers to fix prices, which affected sales to several U.S. computer makers, it was charged

Three executives from Samsung Electronics, 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 $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 $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 Inc., Hewlett-Packard Co., IBM Corp., and Apple Computer Inc.

Including Wednesday’s charges, the DOJ has charged four companies and 12 individuals and assessed fines of more than $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 $300 million criminal fine. Hynix, the world’s second-largest DRAM manufacturer, was ordered in May 2005 to pay $185 million. Elpida Memory of Japan agreed in January to pay $84 million. And Infineon of Germany agreed in October 2004 to pay $160 million.

Grant Gross

Grant Gross, a senior writer at CIO, is a long-time IT journalist who has focused on AI, enterprise technology, and tech policy. He previously served as Washington, D.C., correspondent and later senior editor at IDG News Service. Earlier in his career, he was managing editor at Linux.com and news editor at tech careers site Techies.com. As a tech policy expert, he has appeared on C-SPAN and the giant NTN24 Spanish-language cable news network. In the distant past, he worked as a reporter and editor at newspapers in Minnesota and the Dakotas. A finalist for Best Range of Work by a Single Author for both the Eddie Awards and the Neal Awards, Grant was recently recognized with an ASBPE Regional Silver award for his article “Agentic AI: Decisive, operational AI arrives in business.”

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