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GSI Technology Sues Cypress Semiconductor In High-Tech Memory Suit

Posted  August 1, 2011

GSI Technology, a producer of computer memory products, has filed an antitrust complaint charging Cypress Semiconductor with monopolizing the high-tech static random access memory (“SRAM”) market.

Cypress is one of the major players in the market for static random access memory SRAM market, while GSI is a much smaller producer.

The complaint filed in the U.S. District Court for the Northern District of California claims that Cypress took advantage of the unique features of the SRAM market.  GSI alleges that the computer memory industry relies on standardized products based on customer insistence.  According to GSI, the customer demands that memory modules conform to the same interchangeable structure.

GSI alleges that since 1999 Cypress has violated Section 1 of the Sherman Act by monopolizing the market for SRAM.  GSI claims that Cypress entered into a collusive consortium with certain competitors, including Hitachi and Samsung, in which they shared confidential data such as design simulations and test vectors.  According to GSI, this consortium secretly developed an industry standard for SRAM, to the exclusion of other competitors.  GSI contends that this broke with the previous industry policy of an open marketplace in which competitors had access to the same information at the same time.

According to GSI, the Cypress consortium developed evolutionary product changes confidentially and then released information about these products to customers under non-disclosure agreements.  This meant that competitors could not learn about the new standards until the product was released.  GSI contends that this was a crippling blow in a market where early entry can define success or failure for up to 10 years at a time.

Tagged in: Antitrust Litigation, Monopolization,