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Samsung exec pleads guilty to DRAM price fixing

Head of company's U.S. subsidiary sentenced to 10 months in prison

By Grant Gross
December 21, 2006 12:00 PM ET

IDG News Service - WASHINGTON -- A top executive from Samsung Electronics Co. will serve 10 months in prison and pay a $250,000 fine for his role in a global conspiracy to fix dynamic RAM prices, the U.S. Department of Justice said.

Young Hwan Park, president of Samsung Semiconductor Inc., Samsung's U.S. subsidiary, agreed today  to plead guilty to a violation of the Sherman Antitrust Act for conspiring with other companies to fix DRAM prices, according to court records.

Park, formerly vice president of sales at Samsung, is the fifth Samsung executive to agree to prison sentences in the DOJ's ongoing price-fixing investigation. South Korea-based Samsung is the world's largest manufacturer of DRAM, a memory chip commonly used in PCs and several other electronic devices.

Since December 2003, the DOJ has charged four DRAM vendors and 18 people in the price-fixing investigation.

People who "choose to engage in price fixing are on notice of the consequences of their illegal actions – criminal fines and prison time," Thomas O. Barnett, assistant attorney general in charge of the DOJ's antitrust division, said in a statement.

Park conspired with employees from other memory chip makers to fix the prices of DRAM sold to resellers from April 2001 to June 2002, according to documents  filed Thursday in U.S. District Court for the Northern District of California in San Francisco. Computer makers affected by the price fixing included Dell Inc., Hewlett-Packard Co., Apple Computer Inc. and Gateway Inc., the DOJ said.

Park participated in meetings with other DRAM makers where the prices of DRAM were discussed, and he committed to charging the agreed prices, the DOJ said.

Samsung pleaded guilty to the price-fixing conspiracy and was sentenced to pay a $300 million fine in November 2005. Hynix Semiconductor Inc., the world’s second-largest DRAM manufacturer, pleaded guilty and was sentenced to pay a $185 million fine in May 2005.

In January, Japanese manufacturer Elpida Memory Inc. agreed to plead guilty and pay an $84 million fine. In October 2004, German manufacturer Infineon Technologies AG pleaded guilty and was sentenced to pay a $160 million fine.

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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