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Samsung Cops US$300m Fine

Samsung Cops US$300m Fine

Pleading guilty to price fixing in a US court has landed the South Korean silicon giant a hefty fine.

The company also promised to helpo investigations into other chip makers allegedly in on the deal. Others likely to be under investigation are South Korean company Hynix and the German maker Infineon. A fourth player in the saga is the US-based Micron which has already been assiting prosecuters in return for leniency.

At issue was the long running case of alleged DRAM price fixing between 1999 and 2002 during which time Samsung alone sold more than US$1.2 billion worth of computer memory. Even though the company has agreed to pay the fine and cooperate with further investigations both in the US and overseas, not all Samsung executives will get off without doing the time.

US prosecutors have said that immunity was to be granted to current or former Samsung employees who come to the US to be interviewed by lawyers or testify in court. There are seven exceptions to this offer.

Those seven are Young Bae Rha, Il Ung Kim, Young Hwan Park, Sun Woo ‘Sunny’ Lee, Young Woo Lee, Thomas Quinn, and Yeongho Kang. They have not yet been charged.

Samsung says it has saved up the money to pay the fine, which will be paid in instalments over a five year period – the first of US$50m due within 15 days.

Victims in the case are a blue chip list of IT companies including Apple, IBM, Dell, Hewlett-Packard, Compaq, and Gateway each of which would now be in a position to sue Samsung for damages.

However, the biggest loser was RAM developer Rambus. In a court action last year RAMBUS alleged that Micron, Samsung and Hynix colluded to put it out of business by artificially increasing the price of its RDRAM design in order to sell more DDR RAM for which they would not have to pay royalties.

Though the charges to which Samsung has now pleaded guilty do not directly relate to RAMBUS’ claims, they cover the same period of time, lending more credibility to its case.

 

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