"Samsung Electronics and SK hynix drove up iPad prices"... Three major memory chip makers hit with class action lawsuit

[Financial News] Samsung Electronics, SK hynix, and Micron, the world's three largest memory chip makers, have been hit with a class action lawsuit in the United States over allegations that they artificially drove up DRAM prices. The plaintiffs argued that the companies focused on producing high-bandwidth memory (HBM) for artificial intelligence (AI) and deliberately cut supply of consumer DRAM, sending prices soaring.

According to U.S. IT outlet Wccftech and others on the 28th of last month local time, three small and medium-sized PC assembly and distribution companies, including U.S. computer assembler JB Tech Solutions, and 14 consumers filed a class action lawsuit on the 25th of the same month in the United States District Court for the Northern District of California against Samsung Electronics, SK hynix, and Micron on charges of collusion and price manipulation.
The plaintiffs claimed the three companies used their oligopolistic control of about 90% of the global DRAM market to manage supply and collude on prices. According to the complaint, they deliberately reduced production of general-purpose DRAM such as DDR3 and DDR4, citing expanded HBM output for AI, which created an artificial shortage in the market.
The plaintiffs said this supply management pushed the price of standard DRAM up by about 700% over the past four years and led to higher prices for consumer electronics such as PCs, laptops, and tablets. They also pointed to Apple's recent price increases for the iPad and Mac as an example of the impact of rising memory prices.
The complaint also cited Micron's gradual scaling back of its consumer memory brand Crucial last year as evidence of collusion. At the time, Micron said it would reduce its lower-margin consumer memory business to respond to surging demand for AI memory.
The plaintiffs asked the court to order the three companies to stop their supply controls and sought treble damages under United States antitrust law. The lawsuit could also expand into a broader class action covering consumers and companies that bought products equipped with general-purpose DRAM during the period of sharp price increases.
The suit also cited the companies' past history of price collusion. The plaintiffs pointed to the fact that Samsung Electronics and Hynix Semiconductor, now SK hynix, pleaded guilty in a 2000s DRAM price-fixing investigation by the DOJ, arguing that "anti-competitive behavior is recurring."
Samsung Electronics was fined about $300 million in 2005, while Hynix Semiconductor was fined $185 million. Some executives were also sentenced to prison at the time.
The case has been assigned to Judge Noel Wise of the United States District Court for the Northern District of California. The plaintiffs reportedly include individual consumers such as Thomas Yoo and Thomas Barber, as well as small and medium-sized PC companies including JB Tech Solutions and Troyce Computers.

y27k@fnnews.com Seo Yoon-kyung Reporter