Hynix wins $12 bil. lawsuit against Rambus

By Kim Yoo-chul

Hynix Semiconductor, the world’s No. 2 memory chipmaker, has claimed victory against American chip designer Rambus after a decade-long patent battle.

Observers say this is an impressive milestone for Hynix, allowing it to sell its computer memory chips used in almost all consumer electronics products in its most critical North American market free from royalties.

A court in San Francisco rejected allegations by Rambus that Hynix, along with Micron Technology, conspired to prevent Rambus chips from becoming the industry standard.

Rambus had insisted that Micron and Hynix manipulated the prices of memory chips, in violation of California’s antitrust law.

It has been asking Hynix and Micron to pay $3.95 billion in royalties. Under California law, the amount of antitrust damages could have tripled to $11.9 billion, according to jury findings.

The battle was a huge financial win, as the prize or penalty would have dwarfed all three companies’ normal business income.

Nine of 12 jurors ruled that Micron and Hynix didn’t plot to interfere with Rambus businesses and there had been no conspiracies involving price-fixing of computer chips.

“We welcome the decision. It’s expected that Rambus will appeal, but Hynix is confident if there are further court battles,” Hynix chief executive Kwon Oh-chul said.

Hynix officials said Rambus’ chip-making technologies were outdated and unprofitable, and so they inevitably disappeared from the market.

“Whatever was claimed in court, we believe that the Rambus-designed RDRAM failed to take off due to many decisions, and the immutable nature of the industry, and not a part of any conceivable industry conspiracy,” said Jim Handy, an analyst at Objective Analysis, a market research firm.

Hynix and Micron Technology had been accused of abusing agreements in the early 1990s to produce RDRAM by fixing chip prices and squeezing availability, resulting in Intel turning away from using and adopting Rambus chips as an industry standard.

The world’s biggest chipmaker, Samsung Electronics, last year paid $700 million to end a similar lawsuit with Rambus who said Samsung’s admission of “guilt” in price-fixing would make it better for the ensuing court battle with Micron and Hynix.

A local representative for Rambus declined to comment on the decision.

The ruling is expected to help Hynix strengthen its bottom line, according to market analysts. Korea’s top mobile firm SK Telecom has recently agreed with Hynix shareholders to buy the chipmaker for 3.5 trillion won.