Two dozen firms eyed in NAND pricing conspiracy

September 17, 2007 – Echoing a similar event from the DRAM sector a few years ago, nearly two dozen NAND flash memory chipmakers are reportedly under investigation by authorities in the US and Canada for allegedly conspiring to fix prices.

The announcement came to light in a SEC filing from Sandisk, which indicated that it and 23 other companies are being sued in US District Court in Northern California in a class-action suit, labeled “Stuart Go et al., v. Lexar Media et al,” apparently filed on behalf of a class of purchasers of flash memory. The lawsuit seeks restitution and an injunction, and an unspecified amount of damages (including treble damages).

Sandisk indicated it and its CEO have received grand jury subpoenas from the court indicating the US Department of Justice is investigating possible antitrust violations in the NAND flash memory industry, and also has received similar notice from the Canadian Competition Bureau.

“I’m not surprised by the action, given recent investigations into SRAM and DRAM,” said Edwin Mok, an analyst at Needham & Co. in San Francisco, quoted by Bloomberg. iSuppli analyst Kim Nam Hyung added that “most suppliers mentioned are DRAM makers who should have learned the lesson of the price-fixing case,” noting that today the firms are enjoying good profits for their NAND business, so they shouldn’t be “in a desperate situation forcing them to collude.”

The US Justice Department finalized a multiyear investigation into price-fixing allegations in the DRAM market from 1999-2002, resulting in fines totaling more than $700 million (and jail time for some execs) against Samsung, Hynix, and Infineon. Micron was shielded from investigation by cooperating early with authorities.


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