Grant Gross
Senior Writer

Hynix to pay $185 million DRAM fine

news
Apr 21, 20052 mins

Company took part in international conspiracy to fix DRMA prices

Hynix Semiconductor, a South Korean maker of DRAM (dynamic RAM), has agreed to plead guilty and pay a $185 million fine for conspiring to fix prices in the multibillion-dollar DRAM market, the U.S. Department of Justice (DOJ) said Thursday.

Hynix participated in an international conspiracy to fix DRAM prices, the DOJ said. Its fine is the third-largest criminal antitrust fine in U.S. history and the largest criminal fine levied by the DOJ since President George Bush took office in early 2001.

Hynix’s fine follows a $160 million fine paid by German DRAM maker Infineon Technologies AG in September 2004. Infineon agreed then to cooperate in the DOJ’s continuing investigation of DRAM price fixing between mid-1999 and mid-2002.

Computer makers including IBM Corp., Hewlett-Packard Co. and Dell Inc., as well as “countless U.S. businesses and consumers” were victims of the DRAM pricing conspiracy, said Scott Hammond, deputy assistant attorney general for criminal enforcement in the DOJ’s Antitrust Division.

The DOJ accuses Hynix and other DRAM makers of working together to set DRAM prices, resulting in higher prices for PCs, laptops and other devices. About $7.7 billion worth of DRAM was sold in the U.S. in 2004, according to the DOJ.

“There was almost constant communications between the companies,” Hammond said.

Hammond declined to talk about other pending charges, but said the DOJ investigation is ongoing.

The DOJ filed a one-count antitrust felony charge against the company Thursday in U.S. District Court in San Francisco. The court will have to approve the fine agreement.

In December 2004, four Infineon executives pleaded guilty to charges related to price fixing. The four are currently serving jail terms of between four months and six months, and each paid a fine of $250,000. In December 2003, the DOJ charged a Micron Technology Inc. sales manager with obstruction of justice. He pleaded guilty and was sentenced to serve six months of home detention.

In addition to the criminal charges, the DRAM markers face class-action lawsuits brought by customers of DRAM.

A San Francisco-based attorney representing Hynix was not immediately available to comment following a DOJ press conference.

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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