Legal woes and profits mix as easily as oil and water.
Underscoring the semiconductor industry's recovery from its worst recession ever, Infineon reported that revenues in its core memory chip business powered ahead 43% for the third quarter, while sales in its mobile memory segment were up 38%. Still, the legal woes weighed it down.
The U.S. Justice Department and the European Commission are both pursuing price-fixing investigations among DRAM suppliers, including Infineon, Micron Technology
Spun off from German industrial titan Siemens
Despite the underlying improvements in profitability, the company has continued to be dogged by the antitrust charges, allegations that market researchers at Gartner Inc. find have little merit.
Because chip manufacturers need to keep their wafer fabrications operating even during bad times, DRAM still ends up in inventory even if it does not get sold. For example, Intel
Eighty percent of memory chips are sold in contracts with computer manufacturers, with the rest traded on the spot markets. It's on that residual amount the price fixing investigations are focused.
Infineon, along with other chip manufacturers, including Intel, Advanced Micro Devices
Fool contributor Rich Duprey thinks tar, feathers, and lawyers would be a perfect mix. He does not own any of the stocks mentioned in this article.