Sun to refile DRAM price fixing suit

Sun to refile DRAM price fixing suit

A US federal judge threw out Sun's price-fixing lawsuit against Hynix and other DRAM makers

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

In March 2006, Sun filed a suit in US District Court for the Northern District of California, 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 suit 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 suit has led to multimillion dollar fines paid by several companies. Likewise, in February, Samsung Electronics agreed to pay $US90 million in a DRAM price-fixing suit 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 suit.

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, director of corporate communications for Sun, Kathy Engle, said.

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 suit with the additional information about Sun's equipment sales in foreign markets, and the company expected 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.

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