Samsung Electronics, SK hynix and Micron, the world's three largest memory chipmakers, have been hit with a class action lawsuit in the United States over allegations that they artificially inflated DRAM prices. The plaintiffs claim the companies deliberately reduced supply of general-purpose DRAM under the pretext of expanding production of high-bandwidth memory (HBM) for artificial intelligence, causing prices to spike and pushing up the cost of consumer IT products such as PCs and tablets.
According to US IT news outlet Wccftech on Nov. 28, 14 US consumers and three computer assembly and distribution companies filed a class action lawsuit against Samsung Electronics, SK hynix and Micron in the US District Court for the Northern District of California on Nov. 25, alleging antitrust violations and price fixing.
The plaintiffs include small and mid-sized PC companies such as JB Tech Solutions and Troy's Computers. They argue that the three companies used their oligopolistic structure, controlling about 90% of the global DRAM market, to regulate supply and fix prices.
According to the complaint, Samsung Electronics, SK hynix and Micron reduced production of general-purpose DRAM such as DDR3 and DDR4 while pursuing an expansion of HBM production for AI. The plaintiffs claim this supply control created an artificial shortage in the market, resulting in a surge of about 700% in general-purpose DRAM prices over the past four years.
The plaintiffs noted that rising memory prices led to price increases not only for PCs and laptops but also across IT products that use memory, including MacBooks and iPads. They argued in particular that Apple's recent price increases on some products serve as an example demonstrating the impact of rising memory prices.
They also claimed that the AI boom was used as a justification for price increases. The plaintiffs stated in the complaint that while memory companies cited growing demand for AI HBM, they actually raised prices by reducing supply of consumer DRAM.
Micron's scaling back of its consumer memory brand "Crucial" was also presented as one of the circumstances suggesting collusion. Micron said last year that it would gradually reduce its relatively low-margin consumer memory business to respond to expanding demand for AI memory.
The plaintiffs asked the court to order the three companies to halt their supply control practices, while also seeking "treble damages" — triple the amount of damages under US antitrust law. The lawsuit is also seen as having the potential to expand to consumers and businesses that purchased products containing general-purpose DRAM during the price-increase period.
The complaint also referenced the three companies' past DRAM price-fixing cases. Samsung Electronics and Hynix Semiconductor (now SK hynix) were investigated by the US Department of Justice for DRAM price fixing from 1999 to 2002 and later pleaded guilty. At the time, Samsung Electronics was fined $300 million and Hynix Semiconductor $185 million, and some executives were sentenced to prison terms. Separate damages lawsuits were subsequently pursued against PC manufacturers and consumers.
