US says Samsung to plead guilty, pay US$300 mln

WASHINGTON (Reuters) - South Korea's Samsung Electronics Co Ltd has agreed to plead guilty to a charge that it conspired to fix the price of memory chips and will pay a US$300 million fine, the US Justice Department said on Thursday.

The Justice Department said the criminal antitrust fine was the second-largest in US history, and it left open the possibility that charges could be filed later against individual Samsung employees.

Samsung and its US subsidiary pleaded guilty to conspiring with other chip makers, between April 1999 and June 2002 to fix the prices of memory chips sold to some computer and server manufacturers.

"By conspiring to drive up the price of DRAM, Samsung and its co-conspirators forced consumers to pay more for these products," department acting antitrust chief Thomas Barnett told a news conference.

Under the plea agreement, which must still be approved by US District Court in San Francisco, Samsung has agreed to cooperate in the ongoing investigations, the government said.

Samsung issued a statement saying the price-fixing charges against the company had been "fully resolved".

"Samsung strongly supports fair competition and ethical practices and forbids anti-competitive behaviour," it said.

Barnett said seven Samsung employees were "carved out" of the settlement and could be prosecuted later by the department if it chooses to do so.

Samsung would become the third chip maker to plead guilty in the wide-ranging probe of the prices of dynamic random access memory, or DRAM, chips.

In October 2004 Germany's Infineon Technologies AG agreed to plead guilty and pay a US$160 million fine in connection with the case. In May 2005 another South Korean manufacturer, Hynix Semiconductor Inc, agreed to pay US$185 million.

US rival Micron Technology Inc has cooperated with the probe.

Barnett said the fine against Samsung was larger partly because the company had the largest share of the US DRAM market.

The government has blamed the conspiracy for driving up the price of chips used in products ranging from personal computers and servers to mobile phones, cameras and game consoles.

Computer makers responded to the price hikes by either increasing prices or cutting the amount of memory in their products, Barnett said.

The Justice Department says companies directly affected by the scheme included Dell Inc, Apple Computer Inc, International Business Machines Corp, Gateway Inc, Hewlett-Packard Co and the company it bought, Compaq Computer Corp.

In all, the department said, fines totalling more than US$646 million have resulted from the department's investigation.