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DRAM-Feature

A new lawsuit alleges that Samsung, Hynix, and Micron — which together command 96 percent of the DRAM market — have unjustly colluded to raise the price of DRAM from January 1, 2022 through Feb 1, 2022. The suit notes that RAM prices fell from 2022-2015, when the three companies were independently acting to increase DRAM capacities, but and so sharply rose get-go in 2022 as all three firms decided to restrict DRAM growth to finish downward cost pressure and to lead to a price increase.

Nosotros've documented this same increase, and while it doesn't concord a candle to the GPU price leap of the last ix months, it's absolutely had an impact on the cost of a PC. One could argue that it'due south probably had a larger touch on certain market place segments — boutique PC builders, for example, generally weren't impacted past the GPU cost increases, while the entire market could have been impacted by RAM price jumps. In other words: One price increase dramatically impacted the fraction of the PC market that buys retail channel hardware to the point that it became impossible to recommend buying a standalone GPU for gaming, while the other may have had a much smaller event on the entire market place. According to the conform, Micron, Hynix, and Samsung simultaneously decided to agree on "supply subject area" — i.due east., restricting sales to the PC infinite.

Hither's the lawsuit with its caption of Micron's behavior. All emphasis original:

For example, on March 30, 2022, Micron was specifically asked whether information technology would appoint in supply cuts and Micron's CEO, Marking Durcan, responded that Micron would "be foolish to be the outset ones to take capacity off." Micron's CFO, Ernie Maddock, further confirmed that Micron would not unilaterally cut production: "it'due south a really ill-advised motility to be unilaterally cutting production." But, at the same time, Micron reassured competitors that "our focus is not on marketplace share." Micron told its competitors that it would cease trying to take market share from Samsung and Hynix. On April 28, 2022 Samsung responded to Micron'due south invitation to cut supply by publicly announcing that its DRAM supply growth had turned negative. After these communications, past June one, 2022, DRAM prices reversed grade, started shooting up, and continued to do so throughout the Class Period.

During the Class Period, Defendants continued their efforts to coordinate their DRAM supply decisions, as reflected in public comments by Defendants that urged each other to proceed industry supply in check. Defendants each made public statements affirming their delivery to the mutual program to curtail supply, and to not compete for each other'south marketplace share by supply expansion. For example, Defendants informed the other Defendants through public statements, that they would keep total wafer capacity flat in society to constrain DRAM supply growth, they would only grow DRAM supply between xv-20 pct in 2022, fifty-fifty as DRAM demand grew 20-25 percent, and that they would refrain from taking each other's market share. Defendants' statements were matched with acquit — affirmed in industry reports and analyses – which reinforced each'south commitment to their common scheme. As a result of Defendants' concerted actions to curtail supply and forego market share expansion, Defendants were able to heighten DRAM prices steadily throughout the Class Menstruum, and reap enormous profits, as shown in the chart below.

DRAM-Price-Chart

2 things we'd notation at this bespeak. First, there take absolutely been successful antitrust lawsuits and legal deportment against various semiconductor manufacturers over the years, roofing everything from LCDs to transistors. The idea that Samsung, Hynix, and Micron may take colluded is non crazy, especially given that Hynix, Infineon, Micron, Samsung, and Elpida all pleaded guilty to interest in an international price-fixing conspiracy betwixt 2003-2006. It's non exactly hard to imagine that these companies might be up to their old tricks, especially since the response from these firms to the ongoing surge in DRAM prices might be charitably summarized equally "LOL, Yard."

According to the same lawsuit, Samsung agreed to increment memory chapters just after coming together with People's republic of china'south National Development and Reform Committee (NDRC) in February. Hynix has at present magically also announced that it will increase wafer chapters, and DRAM prices accept begun to drib every bit a result. The official explanation for why DRAM prices rose is that Samsung and the other manufacturers prioritized mobile DRAM over desktop parts in the consumer market. Simply given that PC shipments accept connected to fall from 2022-2018, there's no explanation for why DRAM prices for PCs continued to rise, given that these increases should have otherwise encouraged one or more than manufacturer to increase production, to maximize profits by taking market share. Except, of course, that hasn't happened — and with the RAM industry now reduced to just three firms (Winbond and Nanya technically all the same exist, merely they hold ~one.five percent market place share between them), the opportunities and benefits for collusion are enormous.

Plainly ExtremeTech is not in a position to categorically say that these three companies colluded to raise RAM prices. Simply information technology's non crazy to wait at the huge spike in RAM costs alongside the actions all three firms didn't accept to increase production, and wonder if there wasn't a very tidy little agreement in place to maximize profits at consumers' collective expense.