Memory chip price-fixing settlement reached

Samsung Semiconductor, Infineon Technologies and Hynix Semiconductor agree to pay $160 million.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
2 min read
Three major memory chip manufacturers agreed to pay $160 million to settle a high-profile antitrust case alleging the chipmakers engaged in price fixing over a three-year period.

A federal district court in San Francisco on Wednesday granted preliminary approval to proposed settlements involving Samsung Semiconductor and Infineon Technologies. The court plans to review a proposed settlement for Hynix Semiconductor next week, according to an attorney representing the plaintiffs.

The settlements mark a partial resolution to a high-profile price-fixing case involving a number of memory chipmakers.

Under the preapproved settlements, Samsung will pay $67 million and Infineon nearly $21 million to plaintiffs in the class action civil case. Final approval of the two agreements is scheduled for September. Hynix, meanwhile, has agreed to pay $73 million, but awaits preliminary approval from the court.

The settlements mark a partial victory for the plaintiffs, which include small and midsize businesses that had purchased memory chips directly from the manufacturers. Five other defendants have yet to settle, including Micron Technology and Elpida. A trial is scheduled for February.

"We're still a long way from uncorking champagne," said Fred Taylor Isquith, an attorney for Wolf Haldenstein Adler Freeman & Herz, one of the firms representing the plaintiffs. "There's still a lot of work to do...a lot of money is at stake."

Damages to the plaintiffs are estimated to be in the hundreds upon hundreds of millions of dollars, Isquith said.

The Justice Department charged Samsung, Infineon, Hynix and Elpida with price fixing in the memory chip market from April 1999 to June 2002. The four companies pleaded guilty and agreed to pay more than $731 million in fines. That criminal case also requires jail time for some of the executives.

Last month, four Hynix executives pleaded guilty to price fixing and will serve up to eight months in jail.

A class action lawsuit also has been filed on behalf of consumers who purchased PCs containing the manufacturers' chips during the three-year period. Parties are still gathering evidence and information in that case, Isquith said.

Sun Microsystems, meanwhile, filed a separate lawsuit against the chipmakers in January, Isquith added.

The chipmakers, however, received a recent victory when a federal court judge dismissed a class action lawsuit against them by a group of international companies.