Sun pledges new DRAM price fixing lawsuit

Sun Microsystems is promising to file a new lawsuit after a federal judge on Thursday threw out Sun's complaint that Hynix Semiconductor and other manufacturers of dynamic RAM (DRAM) illegally inflated their prices.

Share

Sun Microsystems is promising to file a new lawsuit after a US judge threw out the company's complaint that Hynix Semiconductor and other manufacturers of dynamic RAM (DRAM) illegally inflated their prices.

In March 2006, Sun filed a case alleging that it had been forced to overpay for memory chips in its servers and storage systems. In addition to Hynix of South Korea, the case named Infineon Technologies of Germany, Japan's Elpida Memory and Mitsubishi Electric, Taiwan's Mosel Vitelic and Nanya Technology.

The charges echoed a similar complaint brought in 2002 by the US Department of Justice. That case has led to multimillion dollar fines paid by several companies. Likewise, in February, Samsung Electronics agreed to pay $90m (£45m) in a DRAM price-fixing case raised by a group of US state governments who alleged that PC vendors such as Apple and Dell passed on the inflated costs to consumers. At the time, Hynix said it would continue to fight that case.

Despite that success by government prosecutors, last week Judge Phyllis Hamilton dismissed Sun's complaint. Hamilton acknowledged Sun's arguments about the financial damages it had suffered from the overcharging, but said she needed to see more detail on DRAM market patterns in countries outside the US, said Kathy Engle, director of corporate communications for Sun.

Hynix did not respond to requests for comment. The company has not been distracted by its legal troubles, but has posted strong sales results in recent quarters. Hynix finished 2006 by leapfrogging Qimonda into second place in the global DRAM market, lagging behind only Samsung, according to the analyst firm iSuppli.

Hamilton gave Sun a deadline of May 4 to refile the case with the additional information about Sun's equipment sales in foreign markets, and the company expects to meet that timeline, Engle said. Sun plans to seek damages for the amount it overpaid on DRAM purchases.

"During the period in which these companies were fixing prices, a very large volume of DRAM was purchased, so we believe there was a significant amount of overcharging," she said.

Find your next job with computerworld UK jobs