Investigation of LCD market widens

An investigation into possible anticompetitive behavior in the flat-panel display market widened Tuesday, with at least four more big vendors saying they had been contacted by investigators.

Samsung Electronics Co. said it had been subpoenaed by regulators in the U.S., South Korea and Japan, while the Japan Fair Trade Commission and the U.S. Department of Justice contacted Sharp Corp. and Taiwan's AU Optronics Corp. The DOJ also contacted a U.S. subsidiary of Taiwan's Chi Mei Optoelectronics Corp.

The investigation first came to light Monday when LG.Philips LCD Co. revealed that it had been subpoenaed by regulators in the U.S., South Korea and Japan.

The probe centers on thin-film transistor (TFT) LCDs, according to Samsung. They are used in a wide range of electronics products, including flat-panel televisions and computer monitors, laptop computers, cell phones and digital music players. The companies being investigated are among the largest manufacturers of the displays.

The investigations center on price fixing, according to the European Commission, which confirmed Tuesday that it too has opened an investigation. Price fixing occurs when vendors cooperate to set prices for their products artificially.

The commission is seeking to "ascertain whether there is evidence of a cartel agreement and related practices concerning price fixing," it said in a statement. It sent formal requests for information last Friday to an undisclosed number of firms that sell TFT LCDs, it said.

The investigation comes on the heels of anticompetition probes in the dynamic RAM (DRAM) and static RAM (SRAM) chip markets. The DRAM investigation also focused on price fixing.

Sharp spokeswoman Miyuki Nakayama said the company was surprised to have received the summons. Sharp has a policy of "fair and ethical management," she said. Meanwhile, Cho Sung In, a spokeswoman for Samsung in Seoul, said Samsung Electronics is committed to "fair competition and ethical practices."

For its part, Sony Corp. said its joint venture with Samsung, S-LCD Corp., had not been contacted by the investigators.

Shares in LG.Philips dropped 4% Tuesday, while Samsung's closed down two-thirds of a percent. The general market, as measured by the Kospi Index, fell 1%. Sharp waited until after the market had closed to announce it had been contacted. Its shares rose 2% Tuesday.

In the DRAM investigation, market leaders Samsung and Hynix Semiconductor Inc. pled guilty in 2005 to price fixing and received fines of $300 million and $185 million, respectively. Japan's Elpida Memory Inc. had to pay $84 million and Germany's Infineon Technologies AG paid a $160 million fine.

In October, several manufacturers of SRAM chips said they had been subpoenaed by the DOJ, although they did not disclose the nature of the DOJ's requests. The companies were Cypress Semiconductor Corp. and the U.S. units of Mitsubishi Electric Corp., Samsung Electronics, Sony and Toshiba Corp.

Paul Meller in Brussels contributed to this report.

Copyright © 2006 IDG Communications, Inc.

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