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Samsung execs go to jail
Three
executives from Samsung Electronics, the world’s largest manufacturer
of DRAM (dynamic random access memory), have agreed to plead guilty and
serve jail time for participating in a worldwide conspiracy to fix DRAM
prices, the US Department of Justice (DOJ) announced Wednesday.
Sun
Woo Lee, Samsung’s senior manager of DRAM sales, agreed to a sentence
of eight months in US prison. Yeongho Kang, associate director of DRAM
marketing for Samsung’s US subsidiary, and Young Woo Lee, sales
director for Samsung’s German subsidiary, both agreed to serve seven
months, the DOJ said.
The three also agreed to each pay a $250,000
fine and cooperate with the DOJ’s ongoing DRAM investigation. The South
Korean executives each face one felony count for violating the US
Sherman Antitrust Act.
“True deterrence occurs when guilty
individuals serve jail terms, and not just when corporations pay
criminal fines,” US Attorney General Alberto Gonzales said in a
statement. “These pleas should send a clear message that we will hold
accountable all conspirators, whether domestic or foreign, that harm
American consumers through their illegal conduct.”
The pleas and
sentences are subject to the approval by the US District Court in San
Francisco. The Samsung three will follow four Infineon execs who were
jailed in December 2004 for taking part in the same price-fixing
conspiracy.
DRAM is the most commonly used semiconductor memory
product, and is used in PCs, laptops, servers, printers, hard disk
drives, mobile phones, digital cameras, game consoles, and other
devices. There were about $7.7 billion in DRAM sales in the U.S. in
2004, the DOJ said.
Between April 1999 and June 2002, the three
Samsung executives conspired with employees of other DRAM makers to fix
prices, according to the charges filed Wednesday. The conspiracy
affected sales to several US computer makers, including Dell,
Hewlett-Packard, IBM, and Apple.
Including Wednesday’s charges, the
DOJ has charged four companies and 12 individuals and assessed fines of
more than $731 million in a wide-ranging DRAM price-fixing
investigation. This adds up to the second largest total ever collected
by the DOJ in a single price-fixing investigation.
The first charges
in the investigation came in December 2003, and earlier this month,
four executives from Hynix Semiconductor Inc. agreed to plead guilty.
Samsung
was ordered in November 2005 to pay a $300 million criminal fine.
Hynix, the world’s second-largest DRAM manufacturer, was ordered to pay
$185 million in May 2005. Elpida Memory of Japan agreed in January to
pay $84 million. And Infineon of Germany agreed in October 2004 to pay
$160 million.
Samsung itself was fined $300 million in December 2005, and Hynix was fined $185 million in April last year.
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