Infineon To Pay $160 Million For Fixing RAM Prices

Jerrod K writes "Infineon Technologies pleaded guilty to charges of price fixing in an international conspiracy. The Justice Department said this is the third largest antitrust settlement ever. Other memory chip makers involved include Hynix, Samsung, and Micron Technology." Reader phalse phace adds a link to CNET's coverage.

Comments

Sweet.

[rincebrain]

Does that mean I can upgrade my RAM for less than the cost of a new processor now?

I mean, seriously. The prices were ludicrous for high-end manufacturers, and the low-end can sometimes die, and you have no recourse.

Huzzah!

Re:Sweet.

[Jason1729]

Compare the transisitor count in a 256 meg DIMM to a CPU. That's 2 gigabits and a minimum of 1 transistor per bit, so at least 2 billion transistors. Intel and AMD barely have over 100 million in their newest CPUs, so the memory has 20 times the transistor count.

A lot more engineering goes into a CPU, but the price of memory compared to a CPU isn't really that surprising.

A lot of the microcontrollers I work with are basically a tiny sliver of processor on the edge of a large field of memory.

Jason
ProfQuotes

Re:Sweet.

[ZorinLynx]

I've always wondered why they can't manufacture DRAM chips with spare memory cells, the same way that hard drives get spare sectors. Then rather than tossing out chips for as little as one bad bit, they can remap the bad bits to the spare cells and still use the chip.

Yields would go up, prices would go down.

I can't be the only person to have thought of this; why isn't it done?

-Z

Re:Sweet.

[LionMage]

I recognize that the RAM is, if not the, then one of the most intricate and cost-intensive parts to produce and to purchase.

Well, I can't speak to the cost-intensive part of your assertion, since I am not privy to some details about the economics of chip production. But intricate? Not hardly. DRAM and SRAM chips are laid out mostly in a grid, with very little real-estate set aside for control logic. The only complexity is the control logic; the rest of the chip is just a matrix of transistors (and, in the case of DRAM, one capacitor per transistor to actually store the bit).

RAM chips are pretty easy to design and lay out because of the inherent regularity in their structure.

The $160 million dollar tax question...

[garcia]

The real question is do they get to give away a bunch of 256k chips to schools as a tax credit?

Re:The $160 million dollar tax question...

[Martin Blank]

It's a fine, not a settlement. They're expected to cut a check for the amount to the government, not reimburse consumers.

Odd Concept

[Timber_Z]

I recall that things got pretty bad for awhile, but I still have a hard time with the concept of price fixing, when I clearly remember paying $150 for 8MB of ram, and how good of a deal that was.

Now thats fair.

[DAldredge]

A local family man is facing 20+ years in prision for walking into the vault at the back where he worked and taking 100,000 USD.

Why do large corps get away with crap like this, hell the goverment doesn't even go after those whitecollar criminals that skip bail...

But, normal crimes they come down hard on.

Re:Now thats fair.

[lothar97]

What's even more aggrevating is that these companies, once they pay for the mistakes in some manner (such as a fine), they are free to function as if nothing went wrong.

A perfect example is MCI/Worldcom. After imploding under massive amounts of fraud, screwing tons of people out of investments, employment, 401ks, etc, the company gets to "re-organize," pay a fine, then get government contracts. I bet if I'm punished for fraud, I would be shunned for life in any type of business setting.

This corporate crime problem will continue as long as it can be solved by fines, admitting no wrongdoing, and the limited minor punishments for those involved. I imagine if we held these people personally liable for all damage, put the company under 5-10 years probation, and made sure large jail sentances were required, we'd see a lot less of this trickery.

Then again, we don't want to hurt the innocent employess, and we don't want excessive government regulation.

Re:Now thats fair.

[Daniel]

My dictionary (written circa 1911) says:

CORPORATION, n. An ingenious device for obtaining individual profit without individual responsibility.

Does that answer the question?

Daniel

Re:Now thats fair.

[Marxist Hacker 42]

We can't put a corp in jail for 20 years, and we can't give it the death penalty for awful crimes.

Actually we could- we just don't because we don't have any politicians left to write the laws to do so, just corporate puppets.

How to put a corporation in jail for 20 years: take away it's bank accounts for 20 years and give the interest to the victims.

How to give a corporation the death penalty: Let the government confiscate it and start competing with other businesses in that industry.

Bet if you had those two punishments instead of the fines, the corporations would shape right up.

Re:Now thats fair.

[chancycat]

Or for that matter, execute convicted perpetrators of fraud, as China does and did recently for four cases of bank faud. Note I do not support capital punishment, and China's examples put the topic into a perspective I've never encountered before: "a 'kill fewer, kill carefully' policy for nonviolent crimes."

Re:Now thats fair.

[killjoe]

"Then again, we don't want to hurt the innocent employess, and we don't want excessive government regulation."

Punishing the guilty should not be seen as excessive govt regulation. The solution is simple. Dissolve the corporation and confiscate all the assets.

It's imperitive that the shareholders get screwed in the worse possible way possible. It was their job to make sure their company was run responsibly and it's their fault that the company committed crimes.

Once the assets get liquidated the money should be given as severence pay to all the employees starting at the bottom and working your way to the top until the money runs out.

Oh well

[JLSigman]

Guess we won't be getting our $13.50 checks. :-p

Free market isn't perfect

[revscat]

Cases like this remind me why I don't think the libertarian philosophy towards free markets is all that realistic. Many libertarians believe that things such as this should be left to the marketplace to settle, and that government "interference" like this ultimately harms the market. I emphatically disagree. There are inherent flaws with the free market that the justice system can and should remedy so that the overall market is healthier thereby. Collusion does no one -- consumers, industries, or the economy as a whole -- any favors, and I fail to see how letting the market handle it would do anything but unfairly fatten the pockets of those who benefit.

Re:Free market isn't perfect

[Jahf]

You're right in the "many libertarians" statement, but that doesn't mean it is a clear majority. Unfortunately for Libs (like me) there are really 2 Lib groups within the party. Right/Conservative and Left/Liberal.

The Liberal side would be more in favor of government taking care of business like this but trying for the most part to stay out of other places like social laws (most especially privacy). The Conservative side is more set on seeing government stay out of business entirely as well as the social aspects.

I'm primarily a Libertarian Left because I'm more moderate on business than a Democrat, but far more liberal on social issues than a Republican, and I think both parties have sold out when it comes to privacy. However in this case I think the matter was solved properly.

Re:Free market isn't perfect

[doc modulo]

In the age of the industrial revolution, it was free market all the way. It turned out to be a reall hell for the employees. Near-slavery situations.

In the end, the manufacturers failed as well, because they gave so little money to their employees and other population groups, that no one could affort their products anymore.

People have to abide by rules, and so do companies/corporations. corporations try to be an "individual" anyway, so they should accept the responsibilities that come with it.

Limitations on what powerful entities can do to the rest of the population is good for the population. In the end it's also good for the powerful because rules make sure that no one can leech the population dry with cartels and monopolies and people will be able to afford the products and services.

Re:And just how do I benefit?

[xsupergr0verx]

Maybe it's like the RIAA settlement.

Each lawyer gets a new yacht, and we get a check for $4 in the mail.

And who benefits from this?

[what_the_frell]

You can bet your cash-starved wallet it'll be the corporations DELL that will receive the compensation/benefit, and keep the RAM pricing the same for the consumers so they can continue to recoup their losses .

My Head Just Exploded

[mattgarnsey]

From the article (condensed for brevity):

Infineon Technologies announced today that it has plead guilty to a single and limited charge related to the violation of US antitrust laws in connection with the pricing in its Dynamic Random Access Memory.

Infineon strongly condemns any attempt to fix or stabilize prices. Infineon is committed to vigorous and fair competition based solely on superior products and services.

It really shocks other libertarians when....

[ShatteredDream]

People like myself, who are more classical liberals than libertarians, apply Lord Acton's famous expression "power corrupts and absolute power corrupts absolutely" to economics. The more wealth that is centralized in faceless organizations, the more power they have. Yet, the wealth is not to be measured in just how much cash they have, but by the position they enjoy which can be worth more than their bank accounts.

Anti-trust laws are nothing more than a way to provide a check on corporate power. They exist to keep companies, especially big corporations, from becoming in Locke's words "a law unto themselves."

Anyone who calls themself a libertarian, opposes antitrust laws and has a sympathetic view of the south in the civil war would do well to read some of the founders of the CSA's opinions on monied corporations. The short summary is that they considered them to be a plague on basic liberties and the free market and were fighting more against the corporations who saught the tariff which taxed the southern economy terribly and used the money to line the pockets of corporations, than it was for "states' rights." The major state's right was to "be free from being sucked dry by monied corporations."

I will say this about monopolies. The government creates many of these headaches that it has to later solve by having expansive IP laws which allow patent holders to rape and pillage innovators. Would someone please tell me why we can patent online shopping carts and file formats? How about business processes in general? What about things we have never even fully or at all implemented ourselves?

If the government were to be reconstituted on classical liberal values, most of these monopolies would die like vampires in the morning sunlight.

Conflict of Interest

[jmulvey]

"Infineon has agreed to pay a $160m fine to the US government"

Once again, the companies profit and the US government gets cash... and joe six-pack gets screwed. I mean, with the government receiving all these settlements from Microsoft and the tobacco companies... why aren't our taxes going down?

The US government has more than a bit of conflict of interest in its role as protector of the public from price-fixing and monopolies, yet recipient of huge settlements when they are allowed to grow and blossom.

I'm sure Infineon, a company that has annual GROSS PROFITS of over $2 BILLION USD a year made a hell of a lot more that $160m. So Infineon makes out, and the government makes out.

But where's my money? You remember me, the guy that got ripped off?

Re:Does this mean memory prices will fall?

[mr_spatula]

Sure. Just like CD prices fell after the CD price fixing settlemet... oh, wait...

Then I guess this will be like my rates with progressive going lower after they had the class action law suit over adjusting rates based on credit... oh, wait... that didn't happen either.

The only peopel to benefit from this will be the lawyers and the major companies - the rest of us will be lucky to get a coupon for a dollar off.

No, That's Impossible

[srwalter]

Every good slashdotter should realize that this is impossible. Theregister must just be trying to pull one over on us. I mean, clearly the Bush Administration is in the pocket of Corporations, and would never allow this to happen to big business. Obviously, the story is a farce.

Re:Correct the %^&$# summary!

[nuclear305]

If you were to actually pay closer attention to TFA, You'd have noticed the related articles linked at the bottom. More specifically this

"The case centres on allegations that between the end of 2001 and mid-2002, Samsung, Hynix, Micron, Infineon and others covertly agreed to up prices. The alleged jump in prices followed a two-year slump in demand that drove most memory production lines into operating at a loss."

They may not have been named in the settlement, but they certainly have been named at one point or another.

Big cartel, this one? Pffft.

[SenorCitizen]

If you want a *big* international anti-trust case, just try sueing OPEC.

How are they any different?

Antitrust!

[Exmet Paff Daxx]

Now let me state the present rules,"
The lawyer then went on,
"These very simple guidelines,
You can rely upon:
Your gouging on your prices if
You charge more than the rest.
But it's unfair competition if
You think you can charge less!
"A second point that we would make
To help avoid confusion...
Don't try to charge the same amount,
That would be Collusion!
You must compete. But not too much,
For if you do you see,
Then the market would be yours -
And that's Monopoly!

- The Incredible Bread Machine

There are no rules, save "Don't Succeed". Gotta love America - they love capitalism, and someday they intend to give it a go.

Re:And just how do I benefit?

[strictfoo]

there's added incintive for the companies to NOT DO THIS SORT OF THING now, the society as a whole benefits and that is how you get the benefit.

Yes, these wonderful lawyers who are doing this for the little people like you and me. The fact that they're making millions of dollars is inconsequential to them.

I mean, look at the music industry! They've definitely changed their ways now that 20 different lawyer firms have made millions off of them and we've all gotten $2.85 checks in the mail.

Re:And just how do I benefit?

[geeklawyer]

Each lawyer gets a new yacht, and we get a check for $4 in the mail.

I must be missing the joke. Why is it bad I get a yacht?

Why do we fine coporations and jail humans?

[nlinecomputers]

If I personally break the law I will probably be incarcerated for my crimes. Yet a corporation who's only job is to make more money then it spends simply pays a fine. If I am in jail I can't earn any money or perform any deeds outside of a very limited set of rules. Corporations shouldn't be fined. They should be forced to shutdown or even be disbanded.

Re:Fine line between "dumping" and fixing

[SpecBear]

I don't see how it's a fine line between dumping and fixing. They seem to be polar opposites. As I understand it:

Fixing: I get together with my competitors and we all agree to sell products at a certain price. Since we're no longer competing against each other, we can negate the downward pressure on prices (and thus profits) that usually results from a competitive market.

Dumping: If I happen to have a bunch of money, instead of cooperating with my competitors, I try to kill them off. I price my products below the cost to make them, ensuring that nobody can run a sustainable business in the market. Since I have a bunch of money, I can last longer than my competitors. Once they die off or move on, I have a monopoly and can jack up prices far above what a competitive market would support.

We all lose if these companies can't stabilize, but we all win if the companies that can't manage their freaking inventory die off and make room for companies that actually read their history and learn from it. Collusion won't end the boom/bust cycle. It'll just ensure that the consumer gets screwed on prices regardless of whether there's a shortage or a surplus.