China calls for DRAM price drop for second time

China calls for DRAM price drop for second time

Business news |
By Peter Clarke

Samsung was told by China to put a cap on memory pricing in February 2018 and was expected to do so when it signed a memorandum of understanding with China’s National Development and Reform Commission (NDRC) that will also cover increased investment in China and business and technical collaboration (see China tells Samsung to put a lid on DRAM price, says analyst).

Now officials at China’s commerce ministry and anti-trust agency have asked Samsung Electronics and SK Hynix to cut the prices of DRAM chips they sell to Chinese technology companies, according to a Korea Times article that references a South Korean government official.

Chinese makers have been struggling to make PCs at a profit and as Samsung and SK Hynix control 75 percent of global supply. China says it wants to ensure fair competition in the market. The two companies may be accused of limiting the volume of DRAM they manufacture in a concerted attempt to push up prices but the report said Samsung and SK Hynix also feel that pressure is also intended to result in more cross-licensing of DRAM technology to Chinese manufacturers.

Another report said that anti-monopoly Bureau of China’s Ministry of Commerce held a meeting with Micron Technology Inc. – the third leading DRAM manufacturer – last week. The three companies are responsible for about 96 percent of DRAM production.

Next: Already called to account

The three DRAM makers are already the subject of a class-action law suit alleging they colluded to raise prices of DRAM and thereby pushed price increases onto purchasers of equipment, such as smartphones and laptop computers (see Micron, Samsung, SK-Hynix pursued over DRAM pricing). The suit was filed by a class-action specialist Hagens Berman Sobol Shapiro LLP (Seattle, Washington) in the Northern District of California.

However, it now appears that China’s government is preparing a similar line of enquiry. China reportedly consumes about 20 percent of global DRAM output and 25 percent of global NAND flash output.

Related links and articles:

Korea Times article

News articles:  

China tells Samsung to put a lid on DRAM price, says analyst

Micron, Samsung, SK-Hynix pursued over DRAM pricing

Samsung, Apple bought 19.5% of global chip supply in 2017

DRAM, NAND price increases slowing

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