11/30/2005

Samsung pleads guilty

Samsung pleaded guilty today to charges that it participated in price fixing. This is significant because Samsung is the largest computer chip maker in the world. In price fixing, Samsung affected the price of computers all over the world. The computer industry is only getting bigger and with news that the largest chip maker participated in price fixing will this affect the market? Most likely not the demand for computers because everybody needs a computer, but it will affect the overall image of the company. This could be damaging because of the competitiveness of the industry. It is hard to believe that the largest maker would want to jeopardize its status within the industry, but it may have felt the pressure from newcomers in the market and other companies that had the inside track.

2 comments:

maddy said...

It may not decrease the demand for computers, but those individual parts could be affected. Samsung may be looking at problems with the companies and manufacturers they supply because they may no longer want to deal with a cheat. This might mean that more expensive chips would be used and the price of the computers might go up. Depending on the elasticity of the market sales may go down. Price fixing will definitely produce a shockwave or two in the market.

Dr. Tufte said...

I'm frightened of this whole suit.

This all goes back to a company in Silicon Valley named Rambus.

Since the late 1990s the strategy of Rambus has been to either sue their competitors for patent infringement, or to plead for antitrust protection.

I can't speak for Samsung in particular, but I've come around to thinking that any story involving Rambus "looks like a duch and walks like a duck".