In basic economics, there is the law of supply and demand. When demand is high but supply isn’t enough, prices go up. The reverse is also true, where if supply exceeds demand, prices usually go down. In the current memory crisis, the demand for consumer grade memory has gone through the roof, exceeding supply, and as a result, memory prices are higher than ever. However, not everyone believes that this happened naturally. So much so that Samsung, Micron, and SK Hynix are being sued over RAM prices.
Samsung, Micron, SK Hynix sued over RAM prices
Samsung, Micron, and SK Hynix are some of the biggest memory suppliers in the world. However, due to the demand for AI data centers and HBM components, these companies have decided to shift production from consumer grade memory to HBM to cater to these data centers.
It might seem like a natural course of action. If there’s a spike in demand, why wouldn’t these companies try to get in on the action, right? However, not everyone thinks that is the case. This is why 17 plaintiffs have filed a lawsuit against Samsung, Micron, and SK Hynix, alleging artificial RAM shortage and price hikes.
According to the lawsuit, it alleges that these companies coordinated a shift towards HBM production. As a result, the production of DRAM chips were suddenly restricted, creating a shortage, and jacking up prices. Neither of the companies have responded to the lawsuit yet. However, they had previously denied any wrongdoing. They claimed that production and prices were simply a reaction to market conditions.
In fact, it was just recently that Micron insinuated that Apple might have had a role to play in the current memory shortage.
We’re all feeling the pinch
That being said, the entire world is currently feeling the pinch. Memory used to be one of the cheaper components when it came to components. However, due to the shortage, memory prices have soared through the roof. According to the complaint, prices have risen roughly 700% over the course of four years.
It also seems that despite Apple’s bargaining power, the company was forced to recently raise the prices of its products. Some companies, like Nothing, were also forced to cancel the launch of an upcoming phone. Unfortunately, it’s hard to say when this crisis will end. Some predict it will be years before things normalize. Others are slightly more optimistic, believing that Chinese companies are getting ready to step in.
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