Rambus loses $4 billion case against Micron, Hynix

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A San Francisco County Superior Court jury has ruled against former memory maker Rambus in its long-running antitrust case against memory makers Micron and Hynix, finding that neither Micron or Hynix conspired to fix the price of memory chips, or conspired with other manufacturers like Intel and Samsung to keep Rambus from gaining traction in the market. The jury’s vote was nine to three after more than eight weeks of deliberation, and Rambus’s stock has taken a beating, losing about 60 percent of its value since the verdict was announced. Rambus has been seeking roughly $4.4 billion in damages to make up for lost profits.

The case goes all the way back to 2004, when memory developer Rambus alleged that fellow memory makers Micron and Hynix conspired with other players in the memory business (including Samsung, Infineon, and Intel) to keep Rambus out of the memory market through a combination of availability constraints (which kept Rambus’s products high-priced compared to competitors) and engaging in price-fixing practices for DDR RAM to keep its prices unnaturally low, reducing or eliminating market demand for Rambus’s RDRAM product.

“Upon succeeding in eliminating RDRAM as a competitor in the main memory
market, the defendants raised the prices of DDR by as much as 500 percent,” Rambus claimed in a statement.

For its part, Micron says it presented evidence showing that Rambus’s memory products weren’t adopted by the borader memory market due to higher manufacturing costs, design issues, and fundamental obstacles presented by Rambus’s business practices, rather than any conspiracy on the part of Rambus’s competitors.

Rambus had been betting heavily on a positive outcome from its case against Micron, in part because, under California law, jury findings of antitrust violations are automatically tripled, which could have put Rambus in line for a payday in the $12 billion range. Instead, Micron and Hynix have been cleared of all charges.

“We do not agree with several rulings that affected how this case was presented to the jury and we are reviewing our options for appeal,” said Rambus president and CEO Harold Hughes.