Samsung And Co. Win Antitrust Appeal Over Memory Pricing

Samsung Electronics, Micron Technology, and SK Hynix escaped antitrust litigation Monday over their alleged scheme to fix the price of dynamic random access memory, when a federal appeals court in San Francisco rejected the case’s consumer claims, reported Bloomberg Law.

The US Court of Appeals for the Ninth Circuit upheld a ruling by Judge Jeffrey S. White, who found in 2020 that a coordinated conspiracy to curtail DRAM production was no more plausible an explanation for rising prices than parallel strategies adopted by similar businesses in a concentrated market.

In the semiconductor world, memory chips are unique. They’re made to industry standards, meaning that a product from one company can be replaced with one from a rival without changing anything else in the computer or phone they go into. That means the chips have been treated like commodities in secondary markets. And, like commodities, the price swings have been dramatic, often leading to gluts where chips sell for less than the cost of production.

Samsung Electronics, SK Hynix and Micron Technology — companies that together have market value of more than half a trillion dollars — are the last remaining contenders in a sector of the global semiconductor market that has proven to be particularly vulnerable to the volatile rises and falls in demand. 

High-end chips have endured such a roller-coaster of value in recent years, being hit by increased demand as well as supply-chain disruptions. High-capacity chips are also considered essential for the development of the next iteration of the Internet, being necessary for handling the large data volumes made possible by 5G technologies.