Risk Management

Micron Settles Price-Fixing Suit

Chip maker expects the proposed deal to result in an $80 million reduction in earnings.
Stephen TaubJanuary 15, 2007

Micron Technology has announced a proposed settlement of a class-action lawsuit brought by certain purchasers of its dynamic random access memory (DRAM) computer chips.

Micron expects the settlement to result in an $80 million reduction in earnings for the fiscal first quarter of 2007, which it reported in December. The company added that it will provide more details in a regulatory filing on Tuesday.

According to the Associated Press, the lawsuit arose from a Department of Justice inquiry into whether chip companies conspired to inflate prices by manipulating the number of DRAM chips released on the market.

The federal investigation reportedly led to guilty pleas and more than $730 million in fines from Samsung Electronics, Elpida Memory, Infineon Technologies, and Hynix Semiconductor. According to the AP, the Justice Department granted Micron immunity from criminal charges in exchange for its cooperation, but that deal did not protect the company from civil lawsuits.

The proposed settlement, which is subject to approval by the U.S. District Court for the Northern District of California, dismisses Micron from a class-action suit against chipmakers brought by direct purchasers of DRAM chips from April 1, 1999, through June 30, 2002. A number of large computer manufacturers chose to opt out of the litigation against Micron, the AP noted.

The wire service also reported that the deal does not include cases filed on behalf of indirect purchasers of DRAM, such as consumers, and does not resolve an antitrust lawsuit filed by at least 35 states.