DRAM makers likely to get fined millions (if not billions) on antitrust fines in China
The Chinese authorities have been investigating the DRAM market for a while now. We've reported on this topic several already. From the looks of it, things are about the get worse for the big three Micron, Samsung and SK Hynix. The manufacturers would have made price deals and agreements with each other.
Remember the good old times you could purchase a nice 16GB DDR4 kit for 75 bucks? Yeah, we all know that DRAM prices have doubled ever since the past two years. That now could be ruled as a direct result due to illegal price agreements that Micron, Samsung, and SK Hynix. To get you an idea, the three of them have a total of 90% market share. DRAM is not just used on your PC of course, pretty much any device with a chip needs RAM memory, including your Smartphones, graphics cards, Laptops but also Android devices, Smart TV and so onwards. DigiTimes reports the three companies could be fined anywhere from 800 million USD upwards to 8 Billion.
Example of a 16GB DDR4 kit 0 prices that jumped up ever since 2016
-- DigiTimes --
DRAM prices have been rising since 2017, putting pressure on China-based smartphone vendors' profitability. The issue has already drawn the attention of China's Anti-Monopoly Bureau of Ministry of Commerce, which met with Samsung to express its concern in December 2017. Nevertheless, such intervention did not stop DRAM prices from rising further in the first quarter of 2018, the sources indicated. In May 2018, the Chinese antitrust regulators met with another major DRAM supplier, Micron, to express concerns about the continued DRAM price rally. Later, the regulators launched investigations into Samsung, SK Hynix and Micron, which collectively hold an over 90% share of the global DRAM market, the sources said. Samsung, SK Hynix and Micron have all confirmed the visits of China's antitrust regulators to their local offices. The companies said they would cooperate but did not elaborate. According to China's antitrust law, Samsung, SK Hynix and Micron could be fined between US$800 million and US$8 billion if found to have engaged in price fixing, the sources noted. The estimated fines are based on their DRAM sales to China in 2016-2017. The three DRAM vendors, along with Infineon and Elpida Memory, were previously fined by the US for price fixing practices between 1999 and 2002. Infineon has already exited the DRAM business, while Elpida was later acquired by Micron.
China has become the largest consumer of DRAM memory. The country imported US$88.92 billion worth of memory chips in 2017, up nearly 40%. As a result, China's antitrust authority is being encouraged to launch a price-fixing probe like the one that took place in the US in 2002, after receiving a complaint submitted jointly by China's local smartphone and other consumer technology product vendors, the sources said. Meanwhile, China is striving to raise the country's IC self-sufficiency rate. A few memory startups, such as Yangtze Memory Technologies (YMTC), are being financially supported by their local governments to develop production technologies in-house. By intervening in the memory prices, China also intends to protect its local memory chipmakers' bargaining power in the future, the sources said.
Senior Member
Posts: 283
Joined: 2016-07-25
Cause it's not about learning, it's about getting away with it.
It seems that, generally, years of massive margins due to price fixing are well worth the fine (that you might not even end up getting)
Senior Member
Posts: 162
Joined: 2018-06-15
This kind of behaviour will allays continue because the punishment never gets anywhere close to the profit made so expect to see it again.
Imprison the perps and take away their personal wealth if you want to stop this from happening again.
Pushing out a fine on the company itself wont do a thing.
Senior Member
Posts: 14302
Joined: 2014-07-21
The issue with such fines is that the ones "suffering", the customers, see not a single $/€/Yuan from that.
Governments earn more by sales taxes, and then fine the companies for less money than they actually squeezed out of it by their sales to customers. So a portion of the increased revenue lands with the companies, the other portion goes to governments.
Nothing for the customer.
Member
Posts: 27
Joined: 2016-01-03
Yet another thing, that we the customers are gonna pay for. However the fine will probably be nothing near to the profits gained from the hiked prices. Crime pays, if you can afford it.
Senior Member
Posts: 558
Joined: 2006-05-22
Whats there to say GOOD they must learn the hard way, then again they have not learned anything from the last time it happened.