State Suit Alleges Price-fixing By Major Computer Chip Manufacturers

Attorney General Spitzer today filed a federal lawsuit charging leading manufacturers of computer memory chips with price-fixing.

New York's lawsuit charges that beginning in approximately 1998, the chip manufacturers made a secret agreement to raise the prices of their memory chips, known in the industry as "dynamic random access memory chips" or "DRAM." DRAM chips are used to hold data and temporary instructions available for quick access while the computer or other digital product is in use. Many of the chips are sold to computer manufacturers, known in the industry as original equipment manufacturers or "OEMs," for use in computers and other products.

New York's action follows proceedings by the U.S. Department of Justice, which thus far has produced guilty pleas by four companies - Samsung, Hynix, Infineon and Elpida - and by 12 executives involved in the scheme. Federal criminal fines against the cartel exceed $730 million, and some of the convicted executives will serve prison terms. A fifth DRAM manufacturer, Micron, has admitted wrongdoing, but was granted immunity from federal criminal charges in return for cooperating in the federal probe. Justice Deptartment officials have called the conspiracy "one of the largest cartels ever discovered."

According to the lawsuit, DRAM manufacturers regularly exchanged price information and other confidential business data in order to raise the prices that OEMs and other DRAM customers paid for the chips. The illegal collusion, in which dozens of individuals participated, continued for several years until the Justice Department criminal investigation began in June 2002.

The defendants in the lawsuit are Micron Technology, Inc., Micron Semiconductor Products, Inc., Infineon Technologies AG, Infineon Technologies North America Corp., Hynix Semiconductor, Inc., Hynix Semiconductor America, Inc., Samsung Electronics Co., Ltd., Samsung Semiconductor, Inc., Mosel-Vitelic Corp., Mosel-Vitelic (USA) Inc., Nanya Technology Corporation; Nanya Technology Corporation USA, Inc., Elpida Memory, Inc., Elpida Memory (USA) Inc., and NEC Electronics America, Inc.

New York's lawsuit - - filed today in federal court in Manhattan - - seeks to recover damages on behalf of consumers in New York, as well as on behalf of New York State and local governments who purchased products containing the price-fixed DRAM chips. The lawsuit is part of a coordinated effort with more than 30 other states that are filing a similar case in federal court in San Francisco.

In New York, the case is being handled by Assistant Attorneys General Richard Schwartz and Jeremy Kasha in the office's Antitrust Bureau.

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