washingtonpost.com  > Print Edition > Business > Articles Inside Business

German Chipmaker Admits Price Fixing

By Curt Anderson
Associated Press
Thursday, September 16, 2004; Page E05

German computer chipmaker Infineon Technologies AG has agreed to plead guilty to price fixing and will pay a $160 million fine, the Justice Department announced yesterday.

In a plea agreement filed in U.S. District Court in San Francisco, Infineon acknowledged conspiring with other companies to fix prices of widely used computer memory products between July 1999 and June 2002.

_____Local Tech News_____
E.U. Regulators Say Microsoft Had Agreed to Sanctions (The Washington Post, Oct 1, 2004)
Johnson Will Retire Nov. 1 As CACI's No. 2 Executive (The Washington Post, Oct 1, 2004)
After the Big Drop (The Washington Post, Oct 1, 2004)
More Headlines
Tech Events Calendar

The victims included some of the world's largest computer companies -- Dell Inc., Hewlett-Packard Co., International Business Machines Corp. and Gateway Inc.

The fine is the third-largest imposed in a criminal case by the Justice Department's antitrust division. The 1999 breakup of a vitamin cartel led to a $500 million payment by Hoffmann-La Roche Inc. and $225 million by BASF AG.

Infineon and other chipmakers produce "dynamic random access memory" products used in digital recorders, personal computers, printers, video recorders, mobile phones and many other electronics. The U.S. market for these products is about $5 billion a year.

The conspiracy drove up the prices for electronic products for businesses and millions of consumers, said R. Hewitt Pate, assistant attorney general for the Justice Department's antitrust division.

"Today's charge and its resulting guilty plea represent an important victory in the department's ongoing fight to break up and prosecute cartels that harm American consumers," Pate said.

The agreement, which a federal judge must approve, calls for Infineon to plead guilty to one felony count of price fixing and to cooperate with the investigation of other producers of computer memory products.

None of the other alleged members of the price-fixing cartel was named in the court papers filed yesterday.

Infineon's competitors in the memory products market include Samsung Corp., Micron Technology Inc., Hynix Semiconductor Inc. and Nanya Technology Corp.

Infineon, based in Munich, said in a statement that the $160 million would be paid in installments through 2009 with money set aside from its third-quarter profits. Infineon also said it "has achieved or is in the process of achieving settlements" with all customers affected by its wrongdoing.

"Infineon strongly condemns any attempt to fix or stabilize prices," the company said.

Micron, based in Boise, Idaho, said it is also cooperating with the Justice Department.

"We will continue to do so and don't expect fines or penalties," said Micron spokesman David Parker.

Hynix Semiconductor did not immediately return messages seeking comment.


© 2004 The Washington Post Company