Samsung, Micron, SK Hynix face class-action lawsuit over alleged 700% DRAM price inflation

The three companies that collectively manufacture roughly 90% of the world’s DRAM chips are now defendants in a proposed class-action lawsuit alleging they worked together to jack up prices by approximately 700% over four years. If that number sounds absurd, consider that these same companies have been caught doing essentially the same thing before.

The lawsuit, filed June 25 in the Northern District of California, names Samsung Electronics, SK Hynix, and Micron Technology as defendants. Seventeen plaintiffs, a mix of individuals and small PC assembly and distribution businesses, brought the case under the caption Garciaguirre et al v. Samsung Electronics Co., Ltd. et al.

What the lawsuit actually claims

The core allegation is straightforward: the three dominant DRAM manufacturers colluded to restrict supply of commodity DRAM, specifically DDR3 and DDR4 memory, while conveniently pivoting their production narratives toward high-bandwidth memory (HBM) used in AI applications.

The plaintiffs claim this coordinated supply restriction began around 2022 and resulted in that eye-popping 700% price increase. The complaint alleges violations of Section 1 of the Sherman Antitrust Act, the foundational US law against anti-competitive business practices that has been around since 1890.

According to the lawsuit, the defendants used inventory management tactics and the industry-wide transition to HBM as convenient cover stories for cutting production. The complaint argues that demand for standard DRAM remained strong throughout this period, meaning the supply reductions had no legitimate market justification.

A familiar playbook

This is not the first time these companies have faced accusations of manipulating the DRAM market. It’s not even close.

SK Hynix paid a $185 million fine back in April 2005 for DRAM price-fixing that occurred between 1998 and 2002. That case established a clear precedent: these specific companies, in this specific market, have demonstrably engaged in price manipulation before.

More recently, a similar class-action lawsuit related to DRAM price spikes during 2016-2018 wound its way through the courts before being dismissed on appeal in 2022. That dismissal likely informs the strategy of the current plaintiffs, who will need to present stronger evidence of explicit coordination to survive the inevitable motion to dismiss.

What this means for investors

As of June 30, there have been no admissions of liability or settlements reported. The case remains in its earliest stages, and the road from filing to resolution in federal antitrust litigation is measured in years, not months.

There’s a meaningful difference between a lawsuit being filed and a lawsuit succeeding. The 2016-2018 case covered similar territory and ultimately failed on appeal. Plaintiffs in antitrust cases bear a heavy burden of proof: they need to demonstrate not just parallel behavior (which is legal) but actual agreement or conspiracy to restrain trade.

That said, the 700% price increase figure is the kind of number that makes judges and juries pay attention. If the plaintiffs can back that claim with solid pricing data and demonstrate that production cuts were synchronized beyond what market forces would explain, this case has legs that the previous one didn’t.

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