Memory makers face price-fixing probe
Posted on 17 Sep 2007 at 12:03
An investigation into price-fixing in the NAND flash memory market has been launched by the US Department of Justice.
It is thought the antitrust investigation will examine a sharp rise in NAND prices that occurred this spring. NAND is the type of memory commonly found in digital cameras and MP3 players, such as the iPod.
The flash memory market is notoriously volatile, and the rise may simply be due to high demand and a failure to increase production capability. For example, a power outage at Samsung's production facility affected NAND prices earlier this year.
Several manufacturers, including SanDisk, Toshiba and Samsung, have all received subpoenas and have agreed to cooperate fully with the investigation.
News of the probe has already started to affect the share price of NAND manufacturers, including market leader, Samsung. Samsung has 46% of the market according to analysts, iSuppli, and its share price has fallen 2% on the back of the news.
The Department of Justice has previously brought many convictions for price-fixing in the DRAM market, and last year started investigating SRAM manufacturers as well. The investigation is expected to take up to two years to complete.
As well as the government investigation, a class action suit has also been brought against a group of 24 NAND manufacturers for allegedly conspiring to, "to fix, raise, maintain or stabilise the pricing of flash memory, and concealment thereof, in violation of state and federal laws."
Worldwide NAND sales are currently very strong and are set to rise by 15% this year, making it a $14.2 billion market.
Author: Matthew Sparkes
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