Lawsuit Claims Top Three RAM Manufacturers Conspired to Inflate Prices

Seventeen plaintiffs, including three small businesses, have filed a class action lawsuit in the Northern District of California against the top three RAM and chip manufacturers: Samsung, SK Hynix, and Micron Technology. The lawsuit claims these companies are colluding to artificially inflate RAM prices by restricting supply, attributing the situation to an AI data center-driven “RAMpocalypse” instead of their own corporate strategies.

The case, Garciaguirre et al v. Samsung Electronics Co., Ltd. et al, was filed recently in California’s Northern District Court and includes small computer retailers Troy’s Computers LLC, JB Tech Solutions LLC, and WNTD Fab LLC among the plaintiffs.

The plaintiffs argue that Samsung, SK Hynix, and Micron Technology are effectively operating as a cartel, manipulating DRAM and chip prices while controlling a significant portion of the market. Proving this allegation will be challenging, but it’s well-known that these three companies dominate around 90 percent of the DRAM market.

Additionally, it’s worth noting that Samsung and SK Hynix have faced legal issues in the past for similar practices. In 2005, a San Francisco jury indicted two Samsung executives and one from Hynix America for DRAM price-fixing and bid-rigging.

Bid-rigging can manifest in various ways, and in this case, Samsung and Hynix America were accused of coordinating price quotes based on agreements made in private meetings, agreeing to set specific DRAM prices for certain original equipment manufacturers in the U.S.

This situation may sound familiar, as a Valve employee previously mentioned that RAM manufacturers effectively blacklisted the company for trying to negotiate RAM prices during the production of the Steam Machine: “Look, there’s no contracts…There’s nothing. Like, those guys…they give us a price every month or something and they say ‘You can buy that many’ and it’s yes or no. And if we say no, then they never talk to us again.”

This time, however, the plaintiffs in Garciaguirre et al v. Samsung Electronics Co., Ltd. et al argue that the manufacturers are using the rising demand for AI data centers as a pretext for their collusion. It’s hard not to sympathize with the plaintiffs, especially considering that Micron Technology’s stock has surged by 1,309 percent and SK Hynix’s by 2,045 percent over the last five years.