Bloomberg News

Rambus Says Hynix, Micron Conspired Illegally as Trial Opens

June 20, 2011

(Updates with Micron general counsel comment in sixth paragraph.)

June 20 (Bloomberg) -- Hynix Semiconductor Inc. and Micron Technology Inc. carried out an “unlawful conspiracy” to drive Rambus Inc. out of the computer memory market, a Rambus lawyer said as an antitrust trial began today in California.

Rambus, based in Sunnyvale, California, is seeking as much as $12.9 billion from Hynix and Micron over Rambus-designed dynamic random access memory, or RDRAM, chips. The $4.3 billion in damages sought by Rambus against the two companies would be automatically tripled under California law, according to Rambus. The chip manufacturers deny the claims.

Hynix and Micron engaged in “a secret and unlawful conspiracy to kill a revolutionary technology, make billions of dollars and hang onto power,” Rambus lawyer Bart Williams told jurors. “The conspiracy worked,” he said. “Rather than win the race to become the next industry standard,” due to the conspiracy, RDRAM “was condemned to a smaller market share.”

Micron and Hynix are scheduled to present their arguments tomorrow.

Rambus claims Ichon, South Korea-based Hynix and Boise, Idaho-based Micron inflated the price of RDRAM chips and collusively underpriced their own SDRAM and DDR chips to undercut competition from Rambus.

‘Niche Technology’

Micron General Counsel Rod Lewis said in an e-mailed statement that Rambus’s case in one example of its “continued attempts to place blame on third parties for its failure to compete successfully in the marketplace.” RDRAM failed because of technological deficiencies, because it was less efficient, and more costly to produce and implement than its competitors, Lewis said.

“Ultimately, RDRAM proved to be a niche technology for limited, high-density use and not suitable for the mass PC, laptop and tablet market,” Lewis said.

Hynix lawyer Ken Nissly didn’t immediately respond to an e- mail seeking comment.

The case is Rambus Inc. v. Micron Technology Inc., 04-431105, California Superior Court (San Francisco).

--Editors: Glenn Holdcraft, Stephen Farr

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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