Memory makers sued for alleged price fixing

Seven of the world’s biggest memory makers are being sued by 34 US states for alleged price fixing.

Infineon Technologies, Hynix Semiconductor, Micron Technology, Mosel Vitelic, Nanya Technology, Elpida Memory and NEC Electronics America have all been accused of violating antitrust laws by conspiring to fix DRam prices. The news comes as iSuppli ups its forecast for the volatile sector.

According to the complaint: “The defendants violated state and federal antitrust laws through a four-year conspiracy (from 1998 through June 2002) to fix DRam chip prices, artificially restrain supply, allocate among themselves the production of DRam chips and markets for the chips, and rig bids for DRam chip contracts.”

This is not the first time memory makers have been accused of price fixing. In recent years the US Department of Justice has secured guilty pleas from Hynix, Samsung, Infineon and Elpida. Fines topping $730m have already been paid.

Bill Lockyer, California attorney general, said: “Price fixing strikes at the heart of free competition and fair play that underpins our economic system and protects the interests of businesses and consumers alike. The defendants in this case conspired to rig the US market for this essential computer product, working together to keep prices artificially high. In the process, they victimised individual consumers, governmental agencies, schools and taxpayers. This lawsuit seeks compensation for those victims and to ensure the defendants never again violate fundamental tenets that make our economy work properly.”

In the market, analyst iSuppli has upgraded its short-term rating to ‘neutral’, from ‘negative’, thanks to improving price and demand.

Prices for double data rate 2 (DDR2) and Synchronous DRam have fallen marginally, but back-to-school demand has begun and DDR2 shipments are up. Manufacturers have also slowed their production output, which is stabilising prices that have been falling since May.

Nam Hyung Kim, director and principal analyst at iSuppli, said: “DRam market fundamentals are sound, with supply and demand in a state of balance. Market conditions will improve again in August after Intel and AMD reduce pricing for their PC microprocessors. This will increase available budgets in PCs for memory, boosting DDR2 demand.”

martin_lynch@vnu.co.uk

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