A class-action lawsuit filed in the U.S. District Court of Northern California accuses memory manufacturers Samsung, SK Hynix, and Micron of engaging in anticompetitive practices that have artificially inflated DRAM prices. The suit, brought by a proposed class of businesses and individual consumers, alleges that these three companies have operated as "oligopolists" in the DRAM market, coordinating supply and pricing since 2022.
The complaint contends that the manufacturers have collectively "fixed supply and prices for DRAM, engaging in conduct that makes no economic sense absent collusion." According to the filing, this alleged coordinated action led to a dramatic increase in conventional DRAM prices, which the suit claims rose approximately 700% over a four-year period. The plaintiffs argue that none of the companies attempted to gain market share by increasing production while others scaled back, stating, "All three pulled back together."
As evidence of this alleged collusion, the suit points to synchronized production cuts, a pivot towards High Bandwidth Memory (HBM) favored by data centers, and an exit from older DRAM standards like DDR3 and DDR4. This strategy, the lawsuit claims, deliberately decreased and restricted conventional DRAM supply, allowing prices to surge rapidly. Might be worth noting Micron's closure of its consumer sub-brand Crucial, which the lawsuit suggests occurred "at the most profitable price point in its history," as an example of artificially constrained supply.
The timing of the lawsuit follows Apple's announcement of significant price increases for its MacBook and iPad lines, with the company citing unprecedented component price hikes. This broader memory cost increase has also impacted the gaming industry, driving up the price of RAM kits for PCs and influencing the specifications of gaming laptops, with many models now featuring less RAM or single-channel configurations. Console manufacturers like Nintendo, Sony, and Microsoft have also implemented substantial price increases for their respective consoles, a move attributed in part to rising component costs.
Barriers to Entry in the DRAM Market
The lawsuit highlights the significant barriers that prevent new entrants from challenging the dominance of Samsung, SK Hynix, and Micron. Establishing a modern DRAM fabrication plant requires an investment of fifteen to twenty billion dollars and takes years to construct. Furthermore, the specialized equipment, such as extreme ultraviolet lithography machines, is sourced from a single Dutch supplier with long-standing commitments to existing manufacturers. The complex process recipes, essential for producing usable chips, are also the result of decades of accumulated trade secrets.
In the U.S. context, the complaint also notes that local export controls prevent Chinese producers from acquiring the necessary current-generation equipment. This, combined with the immense capital and technological hurdles, effectively prevents any outsider from expanding production to undercut the dominant three companies, according to the suit's arguments. The plaintiffs are seeking both financial damages and injunctive relief to halt the alleged anticompetitive practices.
Representatives from Micron, Samsung, and SK Hynix have not yet issued official comments regarding the lawsuit. It is anticipated that the manufacturers may argue that the current market conditions and price increases are a result of unprecedented demand, particularly from the AI sector, and the lengthy lead times required for expanding production capacity. Even major foundries like TSMC are reportedly fully booked for their next-generation facilities before construction is complete.