Rambus: Hynix, Micron conspired to block chips

By Laird Harrison SAN FRANCISCO (Reuters) - Microchip heavyweights Micron Technology Inc and Hynix Semiconductor Inc conspired to squelch Rambus Inc's superior chip technology and keep it from becoming an industry standard, a Rambus lawyer argued in court on Monday. Rambus' rivals countered in closing arguments in California state court that its "RDRAM" memory chip technology failed simply because it was inferior. The three semiconductor corporations have waged a legal battle for years, with Rambus suing to claim some $3.95 billion in lost profits. That figure was scaled back from $4.38 billion after Rambus accepted the defendants' arguments that discounts would have applied.

Rambus's RDRAM chip, used in personal computers, had been in close competition with Micron and Hynix products from the late 1990s, said attorney Sean Eskovitz. "RDRAM should have won this race, but the defendants cheated," he said. Micron and Hynix conspired to lower their prices and drive Rambus out of the market, he added. "It's not just unfair, it's unlawful." Rambus has also accused Micron and Hynix of boycotting its memory technology, according to the lawsuit. Micron, Hynix and Samsung colluded to restrict production and raise the price of Rambus chips in favor of their own technology, to the detriment of consumers, the lawsuit alleges. Rambus settled its antitrust claims against Samsung last year in a deal worth up to $900 million. THE INTEL FACTOR In court, Eskovitz cited memos from Intel Corp saying Rambus's technology was superior. And he played video of Micron Chief Sales Executive Mike Sandler testifying that he had had "improper" conversations with Hynix.

Long lasting tussle with Hynix and Micron

In an earlier lawsuit brought by the U.S. Department of Justice, Hynix pleaded guilty to price-fixing, he added. Micron and Hynix, who will continue closing arguments on Tuesday, deny any anti-competitive conduct and say Rambus had encountered technical and design issues that prevented its technology's wider adoption. Hynix's attorneys said that Intel had given up on Rambus's RDRAM in 1999 in favor of SDRAM -- before the alleged collusion against Rambus had taken place. SDRAM became the widely adopted industry standard. "Rambus's choices doomed this product," argued Hynix attorney Kenneth Nissly. Unable to compete fairly, the company decided to pursue lawsuits against its competitors and partners, he said. Earlier in the trial, the defendants had argued that RDRAM used more electricity and generated more heat, assertions that Rambus's witnesses disputed. Much of Rambus income comes from patent licensing, and it has initiated litigation against a range of tech companies. Winning patent cases makes it easier for Rambus to negotiate additional licensing arrangements. Its shares often gyrate in tandem with major court decisions. On Monday, they closed up 0.9 percent at $13.39. The case in Superior Court of the State of California, County of San Francisco is Rambus Inc. v. Micron Technology Inc. et al, 04-431105.

(Reporting by Laird Harrison; Editing by Phil Berlowitz)