Samsung Pleads Guilty to Price-Fixing Charges, Fined $300 Mln

Memory chip maker Samsung, and its U.S. subsidiary pleaded guilty to price-fixing charges. They agreed to pay a$300 mln fine.

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Samsung Electronics and its U.S. subsidiary Samsung Semiconductor pleaded guilty to price-fixing charges and agreed to pay a $300 mln fine.

The company, as well as other DRAM (dynamic RAM) makers, were targeted for investigation in 2002, a year after the worst technology industry downturn so far this decade. The government claimed the DRAM comapanies conspired to fix memory-chip prices to the detriment of customers including computer nad printer makers such as Dell and Hewlett-Packard. Strong DRAM prices, they said, hurt business, although most DRAM makers posted heavy losses in 2001. DRAM prices remained below or near the cost of production for most of the year.

The latest fine against Samsung is the second largest criminal antitrust fine in U.S. history and the largest cirminal fine since 1999, according to the Department of Justice. Their agreement to pay the fine brings the total dollar amount levied against the companies targeted by the investigation to $646 mln. In May, Hynix Semiconductor agreed to plead guilty and was senttenced to pay an $185 mln fine, while in October 2004 German manufactuer Infineon Technologies pleaded guilty and was sentenced to pay a $160 mln fine. Several executives from major DRAM companies, inlcuding Micron Technology and Infineon, have served prison sentences or paid fines over the case.

Samsung posted lower than expected third quarter net profit since it had only set aside $100 mln for the settlement, the company side in October.