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Infineon Technologies AG formally pleaded guilty and was sentenced on October 20, 2004, for participating in a conspiracy to fix prices of dynamic random-access memory (DRAM). The company paid a $160 million criminal antitrust fine. The Justice Department had announced the proposed resolution on September 15, making the distinction between the agreement and the later court plea important.
What Infineon admitted
Infineon pleaded guilty to one felony count under Section 1 of the Sherman Act. The charge covered an agreement with other DRAM manufacturers to fix prices quoted for DRAM sold to certain computer and server manufacturers from July 1, 1999, through June 15, 2002.
The case was filed in the U.S. District Court for the Northern District of California. The Justice Department’s Antitrust Division and the FBI’s San Francisco offices led the investigation. The DOJ described the matter as an international conspiracy, reflecting cross-border participants and communications; it did not mean that every DRAM sale worldwide was included.
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The DOJ announcement is available at justice.gov, and the department’s case page records the federal proceeding at United States v. Infineon Technologies AG.
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How the alleged price coordination worked
According to the charge and the company’s guilty plea, competitors used meetings, conversations and other communications to discuss prices for particular customers. The DOJ said participants agreed on price levels, issued quotations consistent with those agreements and exchanged customer-sales information to monitor compliance.
DRAM is a standard semiconductor memory component used in computers, servers and many other electronic products. The DOJ described the U.S. DRAM market as exceeding $5 billion in annual sales at the time. Coordinating the price of a widely used input could affect manufacturers’ procurement costs, margins and competitive decisions. Those are economic implications of the conduct, not a finding here that a particular consumer paid a proven overcharge.
Which customers were named?
The DOJ identified six computer manufacturers in describing the affected customer group:
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- Dell Inc.
- Compaq Computer Corporation
- Hewlett-Packard Company
- Apple Computer Inc.
- International Business Machines Corporation (IBM)
- Gateway Inc.
The charge referred to DRAM sold to “certain” computer and server manufacturers. It therefore should not be read as covering every Infineon customer, every product or every transaction during the period.
From announcement to sentencing
| Date | Event |
|---|---|
| July 1, 1999–June 15, 2002 | Period alleged in the Sherman Act charge. |
| September 15, 2004 | The DOJ announced that Infineon had agreed to plead guilty and pay $160 million, subject to court approval. |
| October 20, 2004 | Infineon formally pleaded guilty in federal court and was sentenced to the $160 million criminal fine. |
| December 2, 2004 | The DOJ announced separate guilty-plea agreements by four Infineon executives. |
| 2005–2006 | Hynix, Samsung and Elpida reached additional corporate resolutions in the broader DRAM investigation. |
What the $160 million penalty means
The $160 million was a criminal fine imposed on Infineon after its plea and sentencing. It was not compensation paid directly to computer buyers. The DOJ described the amount as the third-largest criminal fine in Antitrust Division history at that time.
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Infineon’s plea agreement also required the company to cooperate with the continuing investigation of other DRAM producers. For Sherman Act violations predating June 22, 2004, the DOJ noted an ordinary corporate maximum of $10 million, subject to an alternative maximum of twice the gain from the crime or twice the victims’ loss when either figure was greater. The negotiated $160 million resolution therefore reflected the applicable statutory framework and plea terms, rather than a simple $10 million ceiling.
Separate cases against four executives
On December 2, 2004, four Infineon Technologies AG or Infineon Technologies North America executives agreed to plead guilty in separate proceedings. Each received a separate $250,000 criminal fine:
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| Executive | Prison term | Individual fine |
|---|---|---|
| Heinrich Florian | Six months | $250,000 |
| Günter Hefner | Six months | $250,000 |
| Peter Schaefer | Four months | $250,000 |
| T. Rudd Corwin | Four months | $250,000 |
The DOJ said three of the executives were German citizens and Corwin was a U.S. citizen. Their agreements also required cooperation. These individual penalties were separate from Infineon’s corporate fine. The DOJ announcement is at justice.gov.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.The broader DRAM enforcement sequence
Infineon was the first company identified by the DOJ as agreeing to plead guilty in the DRAM investigation, but it was not the final resolution. Later corporate cases included:
| Company | Resolution | Fine |
|---|---|---|
| Hynix | April 2005 agreement in the DRAM investigation | $185 million |
| Samsung | 2005 agreement | $300 million |
| Elpida | January 2006 agreement | $84 million |
The DOJ’s announcements provide the later case context for Hynix, Samsung and Elpida. Those resolutions do not expand what Infineon admitted beyond the charge to which it pleaded guilty.
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The investigation also included an obstruction case. Alfred P. Censullo, a Micron regional sales manager, pleaded guilty in January 2004 to withholding and altering documents responsive to a grand-jury subpoena. That was a separate case from Infineon’s price-fixing plea.
Private lawsuits were a separate source of exposure
A criminal fine does not resolve all private antitrust claims. SEC filings later described purchaser lawsuits seeking treble damages, costs, attorneys’ fees and injunctive relief. Honeywell filed a complaint in May 2006 against Infineon, its U.S. subsidiary and other DRAM suppliers. Related federal, indirect-purchaser and Canadian proceedings were also reported in corporate filings.
These civil actions involved allegations and damages claims distinct from the DOJ prosecution. The $160 million fine should not be described as a damages award or as a payment distributed to buyers. Relevant filings include Infineon-related purchaser litigation disclosures and related federal and Canadian proceedings.
Why the case mattered
The case showed how criminal antitrust enforcement could reach a critical semiconductor input rather than only a finished consumer product. A guilty plea established Infineon’s criminal responsibility for the defined conspiracy, while the named customers and limited period show why broader claims—that the entire DRAM industry fixed every price or that every computer buyer was overcharged by a specific amount—would go beyond the established record.
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