UPDATE 1-Samsung Elec, Hynix, others face EU charges-sources

Wed Feb 3, 2010 7:54am EST

* Infineon, Micron, Elpida also seen facing EU charges

* Same charges seen for NEC Electronics, Hitachi, Toshiba

* Mitsubishi Electric, Nanya Technology also to face charges

* Infineon shares down 1.8 percent

(Adds lawyer's comments, Infineon share price, background)

By Foo Yun Chee

BRUSSELS, Feb 3 (Reuters) - European Union regulators are to charge ten memory chip makers, including Samsung Electronics (005930.KS), Infineon (IFXGn.DE) and Hynix Semiconductor (000660.KS), with fixing prices in breach of EU antitrust rules.

Four people familiar with the situation told Reuters the charges could be made this week, or early next week.

"A statement of objections is expected by Friday," one of the four said, referring to a charge sheet from the European Commission, the EU antitrust watchdog. Another of the four said the statement of objections could be sent on Monday. Samsung Electronics and Hynix are the world's largest and second largest memory chip makers.

The companies to be charged include Micron Technology (MU.O), Elpida Memory Inc 6665.T, NEC Electronics Corp (6723.T), Hitachi Ltd (6501.T), Toshiba Corp (6502.T), Mitsubishi Electric (6503.T) and Nanya Technology (2408.TW).

Infineon said last December the EU antitrust watchdog had opened formal proceedings against it the previous February on suspicion of anti-competitive practices in the European market for DRAM products. Dynamic random access memory (DRAM) chips are used in personal computers, servers, printers, personal digital assistants, mobile phones, game consoles and digital music players.

Infineon shares were down 1.8 percent by 1247 GMT, trimming earlier gains, and underperforming a 0.3 percent gain in the DJ Stoxx technology index .SX8P.

The people familiar with the situation said the companies were expected to settle with the Commission under its new settlement procedure introduced in 2008, possibly making it the first case in which firms admit taking part in a cartel in return for a 10 percent cut in fines.

Experts said it was still not clear how well the new procedure, championed by Competition Commissioner Neelie Kroes as a more effective method to deter infringements and accelerate its decision-making process, would work.

"It remains to be seen whether the settlement procedure is an effective tool in reducing the workload for the Commission and the parties concerned," said an antitrust lawyer who declined to be named.

The watchdog can levy fines of up to 10 percent of a company's turnover for breaking EU laws.

A formal decision is expected to be taken by Spaniard Joaquin Almunia, who will take over from Kroes as competition commissioner this month if the new EU executive is approved by the European Parliament.

South Korean regulators in 2007 dropped an investigation into suspected price-fixing by Samsung Electronics, Micron, Hynix and Infineon.

A Samsung Electronics executive had in April 2007 pleaded guilty to price-fixing in the U.S. government's long-running investigation of the computer memory chip business. (Editing by Louise Heavens)

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