SAN FRANCISCO — A lawyer for Hynix Semiconductor Inc. told a jury Tuesday that Rambus Inc.’s flawed technology and poor business decisions, not collusion by rivals Hynix and Micron Technology Inc., hobbled its chances of making its memory chip the industry standard.
Continuing closing arguments Tuesday at a state-court trial in San Francisco, lawyer Ken Nissly denied that Hynix, the world’s second-largest maker of computer memory, conspired to drive chips designed by Rambus out of the market.
In its closing argument Monday, Rambus reminded jurors that they may consider the fact that Hynix and some of its executives pleaded guilty to U.S. charges of fixing prices of some memory chips.
Nissly told the jurors Tuesday that they must keep the open mind necessary to separate Rambus’s allegations from the Justice Department’s investigation and the pleas. The plea agreement applied to dynamic random access memory, or DRAM, not Rambus- designed memory, or RDRAM, Nissly said.
“Hynix was investigated and Hynix cooperated,” he said. The plea agreement “has nothing to do with Rambus’s claims in this case,” he said.
Rambus contends that Ichon, South Korea-based Hynix and Boise, Idaho-based Micron Technology Inc. colluded to cut the prices of their own memory chips and deserted their commitment to produce RDRAM, relegating it to a niche role.
Micron’s lawyer William Price of Quinn Emmanuel Urquhart & Sullivan started his closing argument Tuesday.
Rambus, which doesn’t make the chips it designs, said it would have made $3.95 billion in royalties without the alleged conspiracy. Under California law, a jury finding of damages in that amount would be automatically tripled to $11.9 billion.
Nissly described what he called Rambus’s “doomed” relationship with Intel Corp., the world’s biggest chipmaker, which in the 1990s selected RDRAM as a solution to a computer- memory bottleneck.
Intel managers testified that the collaboration failed because RDRAM was flawed. They also cited a contract provision that allowed Rambus to block shipments of processors that relied on the chip designer’s technology if certain conditions requiring Intel to promote RDRAM weren’t met.
After arbitration, Intel in 2000 offered to develop an “RDRAM-compatible solution” for high-performance and mainstream segments of the computer memory market through 2002, and in the less expensive segment starting in 2001, Nissly said.
He cited the testimony of William Swope, a former Intel manager, when he was asked what he thought when Rambus rejected the Intel offer.
“I thought the relationship was doomed,” Nissly quoted Swope as saying.
“Intel could make Rambus, and they could unmake Rambus. Rambus itself acknowledges that,” Nissly told jurors. “No Intel witness came and testified in a way that supported Rambus’s case.”
Monday, Sean Eskovitz, a lawyer for Rambus, showed jurors a chart depicting the price decline of RDRAM in the summer of 2000, after its introduction a year earlier. He highlighted video testimony and e-mails between executives and sales people at Micron and Hynix that he said demonstrated how the chipmakers intensified their collusion to stall production of RDRAM.
The collusion drove RDRAM prices high, which in turn caused Intel to alter its memory “road map” to include Double Data Rate chips made by Hynix and Micron, and blocked RDRAM from becoming an industry standard, Eskovitz said.
The two chip manufacturers first fixed their prices below market value and “when they thought they had pushed RDRAM off to the side, they jacked up the prices,” he said.
“Why did they do this? Power and money,” Eskovitz said. “They knew RDRAM was a threat. They knew they needed to shoot it over and over and over again.”
