Micron may admit fixing chip prices with Hynix.

Byline: From Register-Guard and news service reports

Micron Technology Inc., as part of an agreement to win amnesty from prosecution by the Justice Department, may admit it conspired with competitors, including Hynix Semiconductor Inc., to manipulate computer-chip prices, people familiar with the probe said.

Micron, the world's No. 2 maker of memory chips, is in talks to provide information to bolster a possible U.S. case against three other companies in the $16 billion market for dynamic random access memory chips, the sources told Bloomberg News. The U.S. is probing whether Micron conspired with Hynix, Infineon Technologies AG, and Samsung Electronics Co.

Cooperating with the agency may allow Micron executives to avoid prosecution. The department has won jail terms and fines in unrelated price-fixing cases against companies including Archer-Daniels-Midland Co. and Grey Global Group Inc.

``It would be nice to get something like this resolved because it's the sort of thing that distracts management,'' said Marc Klee, who manages the $500 million John Hancock Technology Fund including shares of Micron, which is based in Boise.

Dave Parker, a spokesman for Micron, and Justice Department spokeswoman Gina Talamona declined to comment.

Officials for Hynix, Infineon and Samsung could not be reached for comment.

Hynix has an 850-employee DRAM computer chip factory in west Eugene, plus DRAM chip factories in South Korea.

The department is investigating whether the four chip makers, which account for two-thirds of industry sales, tried to manipulate prices in the spot market for chips. About 80 percent of memory chips are sold in contracts with computer manufacturers such as Dell Inc. and the remainder is traded on spot markets in Asia and the United States. The spot prices form the basis for contract terms and are used by investors and analysts to gauge global supply and demand.

Micron has declined to participate in a joint defense with the other companies and instead is negotiating amnesty with the department, the people familiar with the talks said.

Alfred Censullo, a former Micron sales manager, last month agreed to plead guilty to obstructing justice in the price-fixing investigation. He will admit he altered handwritten notes about chip prices after a grand jury in June 2002 subpoenaed documents from the companies. Obstruction of justice carries a maximum sentence of 10 years of imprisonment, the department said.

The Justice Department typically tries to prove a price-fixing case with help from a company that participated in the effort, said Steven Kowal, a former department prosecutor who is now a partner at Chicago's Bell, Boyd & Lloyd LLC.

Samsung, based in Suwon, South Korea, is the world's largest maker of DRAM chips, according to Gartner Inc. Micron, which started production in 1982 and had $3.09 billion in revenue last year, is the No. 2 maker.

The four companies sell millions of memory chips each month to computer and device makers. Prices and inventory costs can gyrate in just a few days and hurt or boost profit because memory-chip factories, unlike other chip plants, must run continuously.

PC makers last year were unhappy that they had to pay twice as much for memory chips with the newer DDR format than for chips with the older SDRAM design, said Quinn Bolton, an analyst at Oppenheimer & Co..

The price manipulation dispute is just one of several embroiling Hynix and Micron. Micon in the past has tried to buy Hynix, but when Korean executives refused to sell, Micron pushed trade complaints against the firm, alleging that the Korean government had unfairly helped Hynix. Those complaints are still pending. Infineon also has pressed trade complaints against Hynix.