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WORLD BUSINESS

Lawsuit to allege chip price fixed

By CNN's Katy Byron and Jonathan Schienberg

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Chips are used in a variety of consumer electronic products, including PCs and mobile phones.

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(CNN) -- The attorneys general of 34 U.S. states will file a lawsuit in a California court Friday charging several leading computer chip makers with a price-fixing conspiracy, building on precedents set by federal court convictions, according to the California attorney general's office.

The lawsuit alleges seven companies, including Elpida, Micron, Infineon, Hynix, and Samsung, worked together secretly to set the prices of computer chips, called dynamic random access memory (DRAM) well above market value, the California attorney general's office told CNN.

New York Attorney General Eliot Spitzer filed a separate but similar lawsuit in Manhattan district court Thursday. That lawsuit named an additional eight companies.

DRAM is the most common semi-conductor memory format, widely used in a variety of computer, telecommunication and consumer electronic products, including personal computers, laptops, printers, modems, mobile phones, digital cameras, video recorders and televisions.

DRAM sales in the United States alone total more than $7 billion a year.

Range of buyers

Buyers of the alleged price-fixed DRAMs included manufacturers Apple, Compaq, Dell, Gateway, Hewlett-Packard and IBM.

The multi-state lawsuit will be filed in a Northern California district court because a significant amount of the alleged illegal conduct occurred there, according to California Attorney General Bill Lockyer.

Elpida, Infineon, Hynix and Samsung were fined more than $730 million by the Justice Department in federal cases filed in 2002 -- the second largest amount of fines collected by the Justice Department from a single price-fixing conspiracy. Micron received immunity in exchange for cooperating with federal prosecutors.

Micron spokesman Dan Francisco had not seen the lawsuits and could not comment. However, he said, "we have been involved in discussions with state attorneys general for a long period of time."

"As I understand it they wanted to get these cases on file while we discuss the potential for resolution," he added.

Gerhard Zimmermann, a spokesman for German chipmaker Infineon, said that he had not yet seen the lawsuits, and therefore could not comment.

Samsung and Hynix did not return calls to CNN for comment.

-- CNN's Terry Frieden contributed to this report

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