DRAM price fixing: China starts probe into Samsung, SK Hynix, Micron

DRAM manufacturing Q4 2017
China has launched an investigation into South Korea’s Samsung Electronics and SK Hynix as well as U.S.-based Micron Technology, Reuters reported.

Samsung with 46.2 percent, SK Hynix with 31.4 percent and Micron Group with 22.4 percent share are the market leaders in the global DRAM market.

China was probing price-fixing allegations as DRAM prices had risen sharply, the first such investigation by China.

All three companies confirmed that officials from China’s State Administration for Market Regulation had visited their offices.

The three companies are the biggest suppliers of DRAM chips used in smartphones and personal computers to store data.

“China is trying to protect their PC and smartphone market from rising DRAM costs. Typically, China PC and smart phones sell at lower costs/margins than those in other countries,” Stifel Nicolaus analyst Kevin Cassidy said.

The investigation also comes at a time when China is looking to promote its own chip industry to cut its reliance on imports.

Chinese firms have a number of overseas deals to buy foreign chip companies blocked by U.S. regulators in recent years, including a bid by Tsinghua Unigroup to acquire U.S. chip group Micron Technology.