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The FBI exposes LCD Price Fixing Conspiracy

After U.S. arrested Former AU Optronics Corporation president Hsuan Bin Chen and executive vice president Hui Hsiung, each serving sentence of 3 years imprisonment and $200,000 fine (and company had to pay $500 Million and publish in 3 major print publication in Taiwan and U.S.) during September 20, 2012- FBI revealed the findings of an investigation of a 5-year long LCD price-fixing conspiracy which violated U.S. Anti-trust laws.

The FBI revealed that after terrorist attacks of 9/11, top-level executives from a number of Asian manufacturers of LCD panels met secretly in a Taiwan hotel room and agreed to a plan to fix the prices of LCDs in the U.S. and elsewhere.

The price-fixing discussion included exchanged production, shipping, supply, demand and pricing information on LCD panels. Participants agreed on price fixing which resulted in artificial inflation of LCD prices. Tactics remained the same until 2005 when some of their major LCD customers became aware of the conspiracy. Even more disturbingly there was also a price-fixing conspiracy within the DRAM industry and that meetings were kept in restaurants and cafes.

Although the incident did take in Taiwan and U.S., price fixing affects the pricing of panels around the world.

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Edit 19-11-2012: This is a speculation, but instincts and hunches usually have a habit of being right at times. What if Mechanical HDD business is doing the same? There’s Seagate an WD. Before including Toshiba, you need to know that the units for Toshiba (Like the DT01ACA Series) is made by Toshiba- a contract that is signed with WD a few months ago. With no disrespect to the HDD manufacturers, but this will create a sour impression when dealing with manufacturers- especially Tier 1.

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