Samsung, Hynix & Micron facing DRAM Class Action suit

[WMGroomAK]

It's been a hard time on memory makers with selling as much memory as they can produce, however a new class action  lawsuit out of the US District Court for Northern California is asserting that Samsung, Hynix & Micron have been price-fixing DRAM prices.  According to the lawsuit, the companies actions have resulted in 4 GB DRAM prices increasing 130% from July 2016 thru February 2018, while the companies more than doubles their revenue between Q1 '16 and Q3 '17.  It is also alleged that even though DRAM prices more than doubled during that time period, the production costs did not increase and there have been no process changes to justify the price increases.

 

https://hothardware.com/news/samsung-hynix-and-micron-dram-class-action-suit-collusion

Quote

Price fixing in the DRAM space is nothing new; as recently as January, a Chinese regulator accused Samsung other chip manufacturers of artificially increasing prices to pad their margins. Samsung is also no stranger to price fixing, as a $300 million judgement against it and Hynix was handed down in 2006 here in the United States.

Today, however, Samsung and other DRAM manufacturers are facing another legal fight in the U.S., and it comes courtesy of the law firm Hagens Berman. The class action lawsuit was filed today in U.S. District Court for the Northern District of California and alleges that Samsung along with Micron and Hynix conspired to artificially limit the supply of DRAM chips in an effort to keep prices high. As a result, device manufacturers that rely on DRAM chips had to pay inflated prices, and those costs were of course passed on to you, the consumer. This has especially been true as higher DRAM costs have also resulted in inflated prices for graphics cards that PC gamers have been clamoring for, and paying dearly for recently, versus cryptocurrency miners.

...
The lawsuit outlines the behavior, stating: 

Quote

Defendants each made public statements affirming their commitment to the common plan to curtail supply, and to not compete for each other’s market share by supply expansion. For example, Defendants informed the other Defendants through public statements, that they would keep total wafer capacity flat in order to constrain DRAM supply growth, they would only grow DRAM supply between 15-20% in 2017, even as DRAM demand grew 20-25%, and that they would refrain from taking each other’s market share. 

...

If the Hagens Berman name sounds familiar, it’s because it was the firm responsible for securing the aforementioned $300 million settlement against Samsung and Hynix. So, it has the experience in this type of litigation and the investigative know-how to see this case through to its eventual resolution.

 

“What we’ve uncovered in the DRAM market is a classic antitrust, price-fixing scheme in which a small number of kingpin corporations hold the lion’s share of the market,” said Steve Berman, who serves as managing partner at Hagens Berman. “Instead of playing by the rules, Samsung, Micron and Hynix chose to put consumers in a chokehold, wringing the market for more profit.”

While I think there may be a grain of truth behind the case, I'm not sure how much traction it will get since memory is definitely in high demand and iirc these companies have also been working to open up new Fabs which have associated costs that might not be accounted for in this lawsuit.  Either way, it should be interesting and maybe we'll see DRAM prices drop a small bit.

[ItsMitch]

They got some good lawyers, good luck to them. 

[Notional]

Definitely not the first time the dram manufacturers have been caught in cartel actions. The prices are just bonkers now, and I really hope they get a couple of billions in fines from the US and EU. Unfortunately, it will probably be worth it either way for them.

[Electronics Wizardy]

Hey governments, why don't you make it easier to start up another dram company. More competition is better right?

[Razor01]

well the problem was 2 years ago or so ram prices hit a all time low because supply was high and demand dropped, which really hurt these companies, so to get out of that they did this lol.

[dizmo]

The only real question here is: Do they stand to lose more than they made in additional profit.

If it's just a slap on the wrist, they'll likely just pay the fine and carry on.

[MoonSpot]

22 minutes ago, Electronics Wizardy said:

Hey governments, why don't you make it easier to start up another dram company. More competition is better right?

What would you suggest?  And how is it Govs are making it harder?

[Razor01]

7 minutes ago, dizmo said:

The only real question here is: Do they stand to lose more than they made in additional profit.

If it's just a slap on the wrist, they'll likely just pay the fine and carry on.

Last time all companies involved were fined 400 million in EU and 650 million by the FTC.

 

So around 1 billion bucks right, the total RAM market per year is how much?  I would think quite a bit more than that

[Electronics Wizardy]

Just now, MoonSpot said:

What would you suggest?  And how is it Govs are making it harder?

patents are making it much harder to start another dram company.

[Misanthrope]

6 minutes ago, dizmo said:

The only real question here is: Do they stand to lose more than they made in additional profit.

If it's just a slap on the wrist, they'll likely just pay the fine and carry on.

That's not the only question: Punishment that's fitting would be nice, but also stopping the on-going price fixing would really help the market stabilize. Otherwise they will just continue to raise prices more and more.

 

[Misanthrope]

27 minutes ago, SC2Mitch said:

They got some good lawyers, good luck to them. 

Well us as consumers of dram for pcs are only a smart part. And honestly can't really do much.

 

However if somebody like Apple lobbies authorities so they can get better prices and avoid being hit too hard on manufacturing costs for their hardware, now you'll really see some really solid monetary support.

 

Right now they might attempt to just use their political capital instead of going the civil route but I really doubt manufacturers like them didn't have a hand in strongly nudging authorities in this direction.

[ARikozuM]

Remember when 4GB DDR3 used to cost $50? Pepperidge Farm remembers. 

[DeScruff]

6 minutes ago, dizmo said:

The only real question here is: Do they stand to lose more than they made in additional profit.

If it's just a slap on the wrist, they'll likely just pay the fine and carry on.

I put my money on: Slap on the wrist.
Even if the fine was actually substantial, I wouldn't doubt that the DRAM companies made more then enough profit it wouldn't even matter. Then they will "fix their mistake" but the price will still be over inflated, just not by as much. - The old "demand a ridiculous amount, so the amount you originally intended looks more reasonable." trick.

[Coaxialgamer]

5 minutes ago, ARikozuM said:

Remember when 4GB DDR3 used to cost $50? Pepperidge Farm remembers. 

never mind that . Remember when you could get 8GB for that price ?

[MoonSpot]

4 minutes ago, Electronics Wizardy said:

patents are making it much harder to start another dram company.

Really?  Or is it people unwilling to pay for using those patents.  Not all Patents are like APPL trying to corner the market on basic geometric shapes, some did take considerable funds to R&D.  Govs breaking laws to make things cheaper for a new entrant is not something to suggest lightly.  Why would anyone spend any money in R&D if they can just sit back an take it from others (sorta like some countries we know)

[Dabombinable]

Still remember RAM prices locally almost doubling within a week due to the increased manufacturer price. Getting another 2x replacement 4GB DDR3 sticks at least within $40 of the original $60 price was a bit of a bitch.

[dizmo]

14 minutes ago, Razor01 said:

Last time all companies involved were fined 400 million in EU and 650 million by the FTC.

 

So around 1 billion bucks right, the total RAM market per year is how much?  I would think quite a bit more than that

Haha, that's quite a bit but yeah, overall a drop in the bucket.

13 minutes ago, Misanthrope said:

That's not the only question: Punishment that's fitting would be nice, but also stopping the on-going price fixing would really help the market stabilize. Otherwise they will just continue to raise prices more and more.

Realistically what could they do? Ban imports? Ok, there goes pretty much all electronics. That's not going to happen.

6 minutes ago, Sypran said:

I put my money on: Slap on the wrist.
Even if the fine was actually substantial, I wouldn't doubt that the DRAM companies made more then enough profit it wouldn't even matter. Then they will "fix their mistake" but the price will still be over inflated, just not by as much. - The old "demand a ridiculous amount, so the amount you originally intended looks more reasonable." trick.

Haha, yeah. There's a lot of NAND factories coming online in the near future so it'll be interesting to see how that affects the market as well.

[Misanthrope]

39 minutes ago, dizmo said:

Realistically what could they do?

I already elaborated on that: I believe that this is only the first move but if regulations do not work big manufacturers like Apple could take them to civil court and battle it out. Wouldn't be the first win for Apple against Samsung in court btw if you still have questions about the scope.

[dizmo]

2 minutes ago, Misanthrope said:

I already elaborated on that: I believe that this is only the first move but if regulations do not work big manufacturers like Apple could take them to civil court and battle it out. Wouldn't be the first win for Apple against Samsung in court btw if you still have questions about the scope.

One has to wonder if they'd bother. If supply is stretched like it is now, the companies could easily reduce their supply to Apple and increase it to other areas, while maintaining the same revenue. Apple doesn't want to lose potential profit. It's not like they feel the increase in their bottom line as much anyway with their high profit margins.

[ravenshrike]

So when do they go after DeBeers?

[DrMacintosh]

"Let the market sort itself out!"

 

Regulation is good, this legal pursuit is good. Unchecked corporations are a no-no. 

[MoonSpot]

18 minutes ago, ravenshrike said:

So when do they go after DeBeers?

ooOoo, ouch.  Reality strikes again with a zinger, it still suxs to hear it though.

 

However, that is a prime example of why collusion, mono/oligopolies and cronyism are total BS for the whole if ever there was one.

[Sakkura]

5 hours ago, Coaxialgamer said:

never mind that . Remember when you could get 8GB for that price ?

I got 8GB for that price 5 years ago.

[asus killer]

i'm sure they are messing with the market, just hope the fine is so big this is the last time they try this.

[iamdarkyoshi]

I need ram to drop down to 80 bucks for 16GB of DDR4 again. I have several boards waiting for RAM

 

These 170+ prices are just not okay.