Hynix execs to do time for memory price fixing

The U.S. Department of Justice gets tough against foreign execs who fixed prices and lost money anyway.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
Four executives with Hynix Semiconductor in South Korea have agreed to plead guilty for price fixing and serve five to eight months in jail.

The U.S. Department of Justice has charged four companies with attempting to fix prices in the memory market from April 1999 to June 2002. Samsung, Hynix, Elpida and Infineon have all agreed, as corporations, to plead guilty and agreed to pay more than $731 million in collective fines.

The Justice Department, however, is also prosecuting individuals. D.S. Kim, Hynix's general manager for worldwide sales and marketing will serve eight months while C.K. Chung, Hynix's director of global strategic accounts will serve seven months. Two other executives will serve six and five months. Each of the individuals will pay a $250,000 fine.

Micron Technology, a U.S. memory manufacturer, has yet to be charged. But one of its former employees, Alfred Censullo, agreed to a plea bargain in 2003 in which he paid a fine and served six months of home detention.

The Department of Justice made its investigation public in 2002 following a spurt of price increases in the memory market. Before the investigation became public, Michael Dell, then-CEO of Dell Computer, complained that memory makers were engaged in "cartel like behavior.

Ironically, the manufacturers didn't reap huge profits from the conspiracy. Though Samsung has generally turned a profit off DRAM, many companies were reporting losses during those years and sometimes even sold products for less than cost.