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Samsung sets aside $100 million for DRAM probe

Posted: 04 Jan 2005 ?? ?Print Version ?Bookmark and Share

Keywords:dram? hynix? infineon? micron? samsung?

South Korea's Samsung Electronics Co. Ltd said that it has set aside a $100 million provision against a DRAM price fixing scheme that has rocked the industry, according to published reports.

Samsung, the world's largest DRAM maker, is said to have set up a fund within its U.S. subsidiary amid a three-year probe into claims of a price fixing conspiracy between memory makers, according to reports.

"The outcome of this matter cannot be predicted at this time. The company is unable to comment on an ongoing government investigation," according to a statement from Samsung, which was reported by U.K.-based The Times.

The DRAM price fixing case has the makings of the biggest scandal in the history of the semiconductor industry. Back in 2002, Hynix, Infineon, Micron, Samsung and other memory makers confirmed that the U.S. Justice Department undertook an industry-wide investigation into alleged price fixing practices.

There is a smoking gun at Micron Technology Inc. Late last year, Alfred Censullo, who was responsible for Micron's sales efforts in the upstate New York region, "was charged with obstructing justice by altering and concealing documents that contained competitor pricing information," according to a report. Censullo, one of 50 regional sales managers at Micron, could face up to 10 years in prison and a $250,000 fine, according to the report. Micron has accepted Censullo's resignation, the report said.

Then, a federal grand jury is seeking evidence from a former business manager at Samsung Semiconductor Inc. regarding possible antitrust violations by global DRAM makers, according to a report in June.

The former manager, Devin Cole, is fighting the investigation and has refused to turn over evidence, according to a report. He could be found in contempt of court in the U.S. District Court in San Francisco, according to the report.

In December, four executives of German semiconductor maker Infineon agreed to plead guilty to participating in a conspiracy to fix DRAM prices. According to the one-count felony charge filed in U.S. District Court in San Francisco, Heinrich Florian, Gunter Hefner, Peter Schaefer and T. Rudd Corwin were found guilty of conspiring to fix DRAM chip prices between 1999 and 2002. Except for Corwin, a U.S. citizen, the executives are all German citizens.

Each has agreed to pay a $250,000 criminal fine and serve prison terms ranging from four to six months. In addition, the executives agreed to assist an ongoing government probe into possible price fixing in the DRAM industry.

The pleas come two months after Munich-based Infineon agreed to plead guilty to price-fixing charges in the DRAM industry and pay a $160 million fine, the third largest in antitrust history.

- Mark LaPedus

Silicon Strategies

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