Chip Execs Indicted for Price Fixing

A federal grand jury has indicted two Samsung executives and one executive from Hynix Semiconductor for holding DRAM prices artificially high.

WASHINGTON—The United States Department of Justice announced Oct. 18 that a federal grand jury in San Francisco has indicted two Samsung executives and one executive from Hynix Semiconductor in a scheme that held the prices of dynamic random access memory artificially high.

The three executives are Ung Kim, Young Bae Rha and Gary Swanson. Kim and Young are Samsung executives and are citizens and residents of Korea. Gary Swanson was a senior vice president at Hynix Semiconductor and is a resident and citizen of the United States.

The indictment charges that the three men, along with several others who have already pleaded guilty, conspired to fix memory prices through phone calls and meetings in which they agreed how much to charge manufacturers for memory chips.

The Oct. 18 indictments were sought by the DoJs Antitrust Division. If convicted, all three men could receive sentences of up to three years in prison and fines of up to $350.000.00.

However, under the provisions of the Sherman Antitrust Act, the fines could be substantially higher—up to twice the gain realized by the illegal acts.

According to the DoJ complaint, the alleged DRAM price fixing took place between April, 2001 and June 2002. Thirteen executives of the two companies as well as Micron and Infineon have already pleaded guilty and agreed to prison time and/or substantial fines.

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In September, a fourth Samsung executive, Thomas Quinn, agreed to fines of $250,000.00 and an eight-month prison term.

According to the DoJ, the DRAM price fixing investigation has resulted in criminal fines and penalties of $731 million.

The department said that this is the second highest total obtained by the Antitrust Division in a specific industry investigation.

The investigation is ongoing.

Scot Ferguson contributed to this article.

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Wayne Rash

Wayne Rash

Wayne Rash is a freelance writer and editor with a 35 year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He covers Washington and...