Samsung, SK Hynix, and Micron have been slapped with lawsuits in a US District Court in California. 17 plaintiffs are now accusing the three major memory makers of illegally coordinating DRAM supply and, in turn, inflating prices by roughly 700% over the past four years.
The class action lawsuit, Garciaguirre v. Samsung Electronics, accuses the three companies of coordinating a shift towards the production of high bandwidth memory (HBM) as a cover to reduce the manufacturing of older DDR3 and DDR4 modules. In doing so, the plaintiffs argue that the memory makers were able to push their prices to extreme levels, while also preventing other rivals from stepping in to fill the gap.
As we explained in earlier reports, increasing the production of memory modules isn’t as simple as it sounds, even for the likes of Samsung, SK Hynix, and Micron. Existing plants can only churn out a set number of units, and no more. To actually begin producing more units beyond the allotted capacity, these companies would need to build a new DRAM fab, which costs tens of billions of dollars to make, as well as years to build. To date, the three companies are the only ones with the necessary and advanced machines to produce these components.
This isn’t the first time Samsung and SK Hynix have been taken to court in the US. Back in 2005, both companies pleaded guilty to criminal DRAM price fixing, with the latter paying a US$185 million (~RM754 million) fine for its transgression. Getting back to this case, the plaintiffs are seeking class status, an injunction, and treble damages from the courts. They even cited the recent price hike by Apple for its iPad and Mac products as evidence of the three memory makers’ actions.
(Source; Tom’s Hardware, US District Court Filing)
