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June 24, 2010

LITTLE ROCK -- Attorney General Dustin McDaniel and 32 other state attorneys general announced today a $173 million multi-state settlement with six international manufacturers who were sued for price fixing related to the sale of Dynamic Random Access Memory (DRAM) computer chips.

DRAM is a common form of memory chip found in desktop computers, laptops, servers, printers, and networking equipment. DRAM sales to major electronics manufacturers, including Dell, IBM, and Hewlett-Packard, exceed $5 billion a year in the United States.

"These companies conspired to raise the prices of memory chips that are used in millions of computers and other electronic products," McDaniel said. "This settlement sends a strong message that we will take action against companies that illegally inflate prices at the expense of consumers and government agencies."

In July 2006, the multi-state group filed a complaint in federal district court in San Francisco, alleging that consumers and state agencies overpaid for products containing DRAM chips. The DRAM manufacturers named in the lawsuit include American companies Micron Technology, Inc., and NEC Electronics America, Inc., as well as foreign companies Infineon Technologies A.G. in Germany; Hynix Semiconductor, Inc., in South Korea; Elpida Memory Inc. in Japan; and Mosel-Vitelic Corp. in Taiwan.

The Arkansas Attorney General's investigation revealed that from 1998 to 2002, the companies held numerous meetings among their salespeople and upper management in which they exchanged confidential information and agreed to quote inflated prices on DRAM to their customers. The result of this collusion was to keep DRAM prices artificially high.

The defendants agreed to a settlement that resolves the lawsuit brought by the attorneys general, as well as class-action lawsuits by private plaintiffs. If the settlement is approved by the court, the defendants will pay $173 million over two years, plus interest. Specific distribution amounts for each state participating in the settlement will be determined in a future court proceeding.

The settlement also requires the companies to refrain from illegal price-fixing and to conduct employee compliance training.

Samsung and another company, Windbond, reached a separate settlement regarding DRAM chips for $113 million in 2007.

In addition to Arkansas, the states participating in the settlement are Arizona, California, Colorado, Florida, Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia, and Wisconsin.