Chinese government accuses Samsung, Micron, and SK Hynix of fixing DRAM prices
PC builders, enthusiasts, and consumers have been feeling the burn of rising RAM prices this year. Fingers have been pointed at several possible causes, but the Chinese government thinks they may have found the culprit. They claim that Samsung, Micron, and SK Hynix (the three largest DRAM manufacturers in the world) have been fixing the price of DRAM.
According to Chinese officials, inspectors have been investigating the companies for a long time and have collected “massive evidence” pointing to price fixing. In case you aren’t up on your corporate law, price fixing is an agreement between competitors to maintain, or “fix,” the price of products at a specific amount. Price fixing is a serious corporate offense and is denounced by many countries as an anti-competitive and consumer-hostile practice. If the Chinese claims are true, Samsung et. al. may be in boiling water.
This isn’t the first time these three companies have been accused of price fixing. Back in 2005, the U.S. Department of Justice (DoJ) brought formal charges against Samsung, SK Hynix, Micron, and others for fixing DRAM prices. Samsung, SK Hynix, and Micron ultimately pled guilty to the charges and paid massive fines (collectively, about US $650 million), although Micron was given amnesty in exchange for cooperating with the DoJ.
Earlier this year, the three companies were hit with a class action lawsuit accusing them of intentionally restricting DRAM supply to artificially inflate prices. The suit was brought forth after an investigation by the NDRC, China’s antitrust regulator, concerning the dramatic increase in DRAM prices from June 2016 to December 2017 was opened. The class action suit is still pending judgement. The “massive evidence” claimed by Chinese officials may be the result of this investigation.
Samsung, SK Hynix, and Micron currently control about 95.5% of the DRAM market. If the allegations of the Chinese government are true, we may be seeing some unfavorable headlines concerning these three companies in the near future.