A class-action lawsuit has accused the three biggest memory manufacturers of colluding to fix pricing in the midst of an unprecedented increase of consumer RAM and storage pricing.
Samsung, Micron, and SK Hynix has been targeted in the lawsuit, filed on June 25 at the United States District Court for the Northern District of California. The lawsuit claims that the three manufacturer form a monopoly and accuses them of undertaking “concerted anticompetitive behavior.” It goes on to detail how all three retreated from the manufacture of consumer-level memory, such as DDR3 and DDR4, simultaneously, switching instead to feed the growing demand for HBM (High-Bandwidth Memory) and its use in AI data centers.
In another market, this orchestrated supply constraint would often allow other players to take advantage and secure a larger portion of an ignored consumer market. But, as the suit goes on to explain, the capital and, more importantly, time required to construct factories that are capable of manufacturing memory are so high that it’s almost impossible to compete with the established trio at the top.
“No new entrant can discipline [Samsung, SK Hynix, or Micron] in the conventional DRAM market,” the complaint reads, “A single modern DRAM fab costs fifteen to twenty billion dollars and takes years to build; the extreme ultraviolet lithography machines it requires come from one supplier in the Netherlands, committed years ahead to the incumbents; the process recipes that make a fab yield usable chips comprise decades of accumulated trade secrets.”
The lawsuit also points towards similar collusion between the companies in the past. In 2005, SK Hynix and Samsung were fined $180 million and $300 million respectively after pleading guilty to price-fixing DRAM pricing. It is suggested that the same occurred between 2016 and 2018 when prices spiked again, although no legal ruling was passed at the time.
The lawsuit seeks both damages and “injunctive relief” that would end the collusion and offer relief to consumers. “Micron disagrees with the allegations contained in the complaint,” reads a statement by the US-based manufacturer, provided to Rock Paper Shotgun. “We compete vigorously, fairly and in compliance with all applicable laws wherever we do business. We will defend ourselves against these claims.”
The supply constraints for both RAM and storage has had a detrimental impact on the electronics industry, and especially so for PC and gaming hardware. Valve’s Steam Machine and its $1000+ price tag is the most recent example, hot on the heels of the company increasing the price of its 2022 Steam Deck by almost 50%. Sony, Nintendo, and Microsoft have all increased prices of the PlayStation 5, Xbox Series X, and Nintendo Switch 2 respectively, while even Apple was forced to adjust pricing across its product range after attempts to find alternatives failed. Microsoft also doesn’t expect prices to come down soon, stating recently that “console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027.”