"Collusion or Simply a Supercycle?" Memory Trio Faces U.S. Lawsuit as Unprecedented Price Surge Fuels Debate Despite Favorable Legal Precedent

U.S. consumers file class action accusing memory trio of price-fixing
Past rulings favored memory makers, citing market dynamics over collusion
Unprecedented AI-driven memory price surge likely to keep controversy alive

A group of U.S. consumers has filed a lawsuit against Samsung Electronics, SK hynix, and Micron (collectively, the "memory trio"), alleging that the companies deliberately restricted commodity DRAM supply under the guise of expanding production of high-bandwidth memory (HBM) for artificial intelligence (AI), thereby driving prices sharply higher. Market observers acknowledge that the current memory supercycle has produced an unprecedented surge in prices, but caution against drawing premature conclusions given that the three companies have prevailed in similar litigation in the past.

Courtroom Battle Surrounding the Memory Trio

According to U.S. technology outlet Wccftech on June 29 (local time), 14 U.S. consumers and three small PC assembly and distribution companies filed a class-action lawsuit against the memory trio in the U.S. District Court for the Northern District of California on June 25. The plaintiffs claim that the companies, which produce the vast majority of the world's DRAM, reduced output beginning in 2022 under the pretext of inventory management while intentionally engineering a supply shortage that pushed product prices up by roughly 700% over the past four years. They further argue that the expansion of HBM production was used as a vehicle for collusion.

The plaintiffs alleged that "the oligopolistic DRAM manufacturers collectively coordinated the transition toward HBM while simultaneously phasing out DDR3 and DDR4," adding that rising memory chip prices ultimately translated into higher prices for finished IT products such as MacBooks and iPads, causing direct financial harm to consumers. They also argued that in a competitive market, production cuts by one manufacturer would ordinarily be offset by increased output from rivals. Instead, all three companies reduced production simultaneously, effectively creating the equivalent of allocating production quotas among themselves.

The plaintiffs also cited the companies' previous involvement in price-fixing cases. Samsung Electronics and Hynix Semiconductor (the predecessor of SK hynix) were previously fined $300 million and $185 million, respectively, by the U.S. Department of Justice for conspiring to fix DRAM prices in the U.S. market between 1999 and 2002. Referring to that case, the plaintiffs argued that "Samsung promoted, rather than disciplined, executives involved in criminal conduct," claiming the company had concluded that profits generated through collusion outweighed the cost of legal penalties. They further asserted that the episode demonstrated a systemic corporate complacency toward violations of antitrust law.

Legal Precedent Favors the Memory Makers

The market is paying close attention to the fact that a recent case bearing significant similarities ultimately ended in favor of the memory trio. In 2018, U.S. law firm Hagens Berman filed a consumer class-action lawsuit against Samsung Electronics, SK hynix, and Micron in the U.S. District Court for the Northern District of California. Plaintiffs alleged that from mid-2016 through early 2018, the three companies intentionally suppressed DRAM supply growth while signaling production restraint through public statements to drive prices higher. Their argument centered on Samsung's decision to reduce DRAM production in the third quarter of 2016, followed by similar moves by Micron and SK hynix in the subsequent quarter, triggering a sharp increase in DRAM prices.

However, in September 2019, the district court largely granted the defendants' motion to dismiss. Judge Jeffrey White of the Northern District of California ruled that the plaintiffs, as indirect purchasers, had failed to sufficiently establish a causal connection between the defendants' conduct and their alleged damages, while also failing to adequately explain how higher DRAM component prices were passed through to the prices of finished consumer products. The plaintiffs subsequently filed an amended complaint, but the district court dismissed the case again in December 2020. The plaintiffs appealed, sending the case to the U.S. Court of Appeals for the Ninth Circuit.

The appellate court ultimately ruled in favor of the defendants. On March 7, 2022, the Ninth Circuit upheld the lower court's dismissal, finding that the plaintiffs had failed to plausibly allege a conspiracy under Section 1 of the Sherman Act. The court concluded that Samsung's initial decision to curb supply growth, followed by similar actions from Micron and SK hynix, was more indicative of competitors following the market leader than engaging in coordinated collusion. Given the industry's oversupply and falling prices at the time, the court found it economically rational for rival companies to prioritize restoring profitability. In other words, the actions of the memory trio could be sufficiently explained by normal market incentives.

AI-Driven Market Upheaval Leaves Room for Debate

Some analysts, however, argue that the current memory supercycle differs meaningfully from the circumstances underlying that legal precedent. They contend that the recent pace of memory price increases is too steep to be explained solely by an ordinary industry recovery. According to market research firm TrendForce, contract prices for commodity DRAM rose between 93% and 98% quarter-over-quarter in the first quarter of this year, while industry-wide DRAM revenue increased 81% over the same period. Samsung Electronics also disclosed that its average selling price (ASP) for memory products in the first quarter jumped approximately 146% compared with the full-year average of last year, while SK hynix reported that its DRAM ASP climbed by the mid-60% range from the previous quarter.

The immediate catalyst behind the extraordinary price surge has been the global race to build AI infrastructure. As AI has become the focal point of global technological competition, cloud service providers (CSPs) and major technology companies have been aggressively securing memory supply. TrendForce said North American CSPs are accelerating deployment of AI inference infrastructure and expanding procurement of high-capacity RDIMMs, prompting memory suppliers to prioritize production capacity for HBM and server-grade products. This has tightened supply not only for AI-focused products but also for commodity DRAM. Notably, commodity DRAM prices have risen even more sharply than HBM, the segment expected to benefit most directly from AI demand.

Visible Alpha, an analytics firm under S&P Global, forecasts Samsung Electronics' DRAM revenue per bit to rise 116% year-over-year in 2026. It projects DRAM revenue growth of 78% for SK hynix and 54% for Micron. By contrast, expected increases in HBM average selling prices are relatively modest at 8% for Samsung Electronics, 1% for SK hynix, and 22% for Micron. Commenting on the situation, one market official said, "Questions about whether the memory trio is acting in concert have surfaced during virtually every semiconductor boom cycle, but this cycle stands out because price volatility in commodity DRAM has been unusually pronounced. While the combination of surging AI demand and suppliers' shift in product mix appears to have created this exceptional pricing environment, suspicions regarding possible collusion among the memory makers are unlikely to disappear anytime soon."