Unsplash: possessedphotography
A new class action lawsuit has accused Samsung, SK Hynix and Micron of working together to restrict the supply of conventional RAM while shifting production toward AI-focused memory, allegedly driving up prices for consumers and businesses alike.
The lawsuit, first reported by Law360, was filed on behalf of a proposed class of individual and business consumers. It claims the three companies, which produce the vast majority of the world’s DRAM, coordinated efforts to reduce the supply of DDR3 and DDR4 memory while prioritizing production of high-bandwidth memory (HBM), a more expensive type of DRAM primarily used in AI data centers.
According to the complaint, the alleged strategy contributed to steep price increases across the consumer electronics market as manufacturers struggled with rising memory costs.
Lawsuit claims RAM makers restricted supply while AI demand surged
The complaint alleges Samsung, SK Hynix, and Micron simultaneously cut production of conventional DRAM, pivoted manufacturing toward HBM, and reduced the availability of DDR3 and DDR4 memory despite rapidly increasing prices.
“The DRAM oligopolists have simultaneously cut production, coordinated a pivot to HBM and exit from DDR3 and DDR4, and otherwise decreased and locked up conventional DRAM supply while prices charged up with mind-blowing scale and rapidity,” the lawsuit states.
Unsplash: @harrisonbroadbent
The plaintiffs argue that in a competitive market, rising prices would normally encourage at least one manufacturer to increase production and capture market share. Instead, the complaint alleges the three companies collectively maintained a limited supply while demand continued climbing.
It also claims consumers purchasing conventional DRAM, along with products containing it, paid inflated prices because of what it describes as a distorted market.
The lawsuit argues the three companies effectively control the global DRAM market and face little realistic competition because building new fabrication plants requires investments of tens of billions of dollars and years of development. It also claims that manufacturing expertise and export restrictions create additional barriers preventing new competitors from entering the market.
Apple CEO Tim Cook warns customers of upcoming price increases across devices
Xbox CEO says they can’t make enough consoles due to “hardware component crisis”
Companies have previously faced DRAM price fixing allegations
The lawsuit points to previous cases involving the same companies.
In 2005, Samsung pleaded guilty to participating in what the US Department of Justice described as an international conspiracy to fix DRAM prices and agreed to pay a $300 million fine. SK Hynix also pleaded guilty and paid a $185 million fine, while Micron avoided financial penalties after reporting the conduct and cooperating with prosecutors.
The complaint also references investigations by Chinese regulators following another spike in DRAM prices between 2016 and 2018, arguing the current allegations represent “the third such cycle in the same market, among the same firms.”
Valve
The lawsuit arrives as memory costs continue to affect consumer electronics pricing.
Last week, Microsoft increased Xbox console prices by between $100 and $150, saying memory and storage costs had risen by more than 2.5 times.
Apple also raised prices across several hardware products, while Valve previously said its planned pricing target for the Steam Machine was “no longer viable” because of rising memory and storage costs.
