Samsung & Others Accused Of DRAM Price-Fixing In China

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According to new reports out of Taipei, the world's top three suppliers of DRAM may have been implicated in a price-fixing scheme which could result in fines of up to $8 billion. The ongoing investigation stems from a trend in the cost of the components in the region which is alleged to be the result of collaboration between Samsung, SK Hynix, and Micron Technologies. That's according to concerns filed jointly by local smartphone and consumer technology vendors. China's Anti-Monopoly Bureau of Ministry of Commerce first met with Samsung regarding the concerns last year but prices have continued to rise regardless of that meeting. That has led to further meetings with all three companies back in May, with each company confirming that the meetings with antitrust regulators have happened. Each has also said that they are cooperating with investigators but no further details about that have been provided.

In the meantime, the investigation could prove problematic for the three DRAM manufacturers since the region is actually the largest consumer of the components. This also wouldn't be the first time any of the three has been fined for the illegal practice. Simultaneously, branches of the Chinese government are already funding local memory-based startups such as Yangtze Memory Technologies. Given China's history of banning wayward companies or those that take part in undesirable practices, there is a risk that the consequences of any newly discovered price-fixing could go beyond fines. Bearing that in mind, a more standard fine based on the companies' DRAM sales between 2016 and 2017 would be expected to range between $800 million and $8 billion.

For Samsung, the company has built a substantial portion of its revenue on sales of DRAM and similar components. So price-fixing allegations could have a wide-ranging impact on its overall status as a leader in that particular market. What's more, it could impact the company's standing in other areas of operation, depending on the assigned consequences. China was responsible for nearly $89 billion in memory imports over the course of 2017. Dismissal from the region may be detrimental to the smartphone manufacturer, as would large fines due to the number of recent legal battles the company has been involved in. It would, in turn, also give other manufacturers an opportunity to take market share.

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