Hynix Execs Agree to Jail

Four executives of South Korea's Hynix Semiconductor will serve jail time in the U.S., the latest development in a federal price-fixing investigation that has netted several of the world's top memory-chip makers.

The U.S. Department of Justice announced Wednesday that it had obtained guilty pleas from the individual Hynix managers, who admitted their role in a global cartel to manipulate prices for DRAM computer chips.

Hynix had already pleaded guilty in May 2005 and agreed to pay a $185 million fine.

The four executives, including Hynix's head of worldwide sales and marketing and the director of global strategic account sales, met with competitors between 1999 and 2002 and agreed to set DRAM prices at specific levels for certain customers, according to the DOJ.

"Prison time for price fixers is the most potent deterrent to illegal cartel activity," said Thomas Barnett, assistant attorney general in the DOJ's antitrust division. "These guilty pleas demonstrate our commitment to ensuring that participants in cartels serve time in prison."

So far, four companies and nine individuals have been charged in the case, resulting in a collection of $731 million in fines. Samsung agreed to pay $300 million in November 2005, the largest fine of the four.

Germany's Infineon Technologies ( IFX) and Japan's Elpida Memory have also pleaded guilty.

According to the one-count felony charges filed in a federal court in San Francisco Wednesday, the four Hynix executives conspired with employees at other memory manufacturers to rig prices for DRAM sold to Dell ( DELL), Hewlett-Packard ( HPQ), Apple Computer ( AAPL) and other computer makers.

The defendants will serve jail terms ranging from 5 to 8 months, in addition to each paying a $250,000 fine and cooperating with the ongoing investigation.

In December 2004, four Infineon executives pleaded guilty in the DRAM investigation and served jail terms of 4 to 6 months.

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