Chip makers in the frame over price fixing and collusion

The two-year investigation into a host of big name chip manufacturers - Samsung, Hynix, Micron and Infineon among them - over alleged price fixing and collusion could be drawing to a close, with a prosecution on the way.

The investigation, which begun in 2002, has been examining whether the chip makers had swapped pricing information and production schedules before the industry saw a price hike.

According to today's Wall Street Journal, the investigation is nearing its end and is expected to result in criminal charges against some of the companies involved, while others are thought to be considering entering plea deals.

Among the emails seen by the WSJ, one memo from a Micron executive said on the subject of a price rise: "The consensus from all suppliers is that if Micron makes the move all of them will do the same and make it stick."

Micheal Dell is thought to have highlighted the issue to investigators when he said: "I think we saw cartel-like behaviour by a couple of DRAM suppliers. It appears to have been successful for a very short period of time."

Successful indeed. Prices tripled between November 2001 and the early months of 2002 after a two-year plunge but then dropped back down. "These companies assumed that they could increase the price of DRAM and see an increase in supply," Dell said, "but the world doesn't work that way," after some hardware manufacturers sourced alternative suppliers or cut back on memory.

Nevertheless, it seems things are going the memory sellers' way. A Gartner report published today predicts a spend of more than $217bn on chips this year, with a compound annual growth rate of more than 10 per cent for the industry until 2008.