U.S. states sue 7 global memory chip Cos.

SAN FRANCISCO  - Some 34 U.S. states have sued seven global memory chip

makers, including Micron Technology Inc., and Hynix Semiconductor Inc., on

charges of price-fixing that cost consumers an estimated hundreds of millions of

dollars.






The lawsuit, filed in U.S. District Court in California, accuses the companies
of violating state and federal antitrust laws during a four-year conspiracy to

fix prices for dynamic random access memory, or DRAM, chips amid a glut on the

market.






The multi-state complaint comes one day after New York Attorney General Eliot
Spitzer filed his own complaint that mirrored the charges brought by the others

and included Samsung Electronics Co., the world's largest memory chip maker.






The multi-state lawsuit did not name Samsung to give the company and attorneys
general time to reach a potential settlement - something Spitzer, who is running

for governor, elected not to do.






Samsung said it expects to resolve the lawsuit, while a Micron spokesman said
the Boise, Idaho-based company has been in talks.






In the complaint, California Attorney General Bill Lockyer and his counterparts
accuse the companies of fixing DRAM chip prices, artificially restraining supply

and rigging bids for contracts from 1998 to 2002. Lockyer is the lead plaintiff

as many of the companies have operations in California, home to Silicon Valley.






The lawsuit alleged the price-fixing caused computer makers to pay more for
chips and then pass those costs along to consumers, a figure estimated as high

as hundreds of millions of dollars. The multi-state lawsuit seeks to recoup the

overcharges as well as damages.






"Defendants and their co-conspirators have engaged in a contract, combination,
trust or conspiracy the effect of which was to stabilize prices at which they

sold DRAM and to artificially inflate the price levels at which they sold DRAM,"

the complaint said.






The legal action comes as memory chipmakers enjoy relatively steady prices and
look for firmer demand toward the year-end shopping season and the consumer

launch early next year of Microsoft Corp.'s Vista operating system.






It also follows a U.S. Justice Department probe launched in 2002 that resulted
in hundreds of millions of dollars in fines levied against Samsung, Hynix,

Infineon, Elpida Memory Inc. and other chip makers.






The federal investigation followed a plunge in the prices for memory chips used
in computers and other electronics, which forced a wave of industry

consolidation and pushed several chip makers near bankruptcy.






The multi-state lawsuit also names many of the world's top-ranked memory chip
makers including Hynix; Taiwan's Mosel Vitelic and Nanya Technology Corp.;

Japan's Elpida and NEC Electronics Corp.'s NEC Electronics America; and Infineon

Technologies AG of Germany.






Some of the companies could not be reached for comment while others declined to
do so as they had not yet seen the lawsuit.