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Probes from China DRAM chip manufacturers – Samsung Elec, SK Hynix and Micron



SEOUL (Reuters) – China has launched an investigation into Samsung Electronics Co Ltd, SK Hynix Inc and Micron Technology Inc, the three semiconductor manufacturers that control the DRAM memory chip market.

PHOTO OF THE FILE: The pieces of the memory chip of the American manufacturer of memory chips MicronTechnology are shown at its stand at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS / Kai Pfaffenbach / File Photo [19659003] A source with knowledge of the matter said that Beijing was investigating the pricing accusations because DRAM prices had risen sharply, the first such investigation by China.

"The investigation has begun in earnest," the source said, requesting anonymity because of the sensitivity of the matter.

The prices of DRAM chips, which help devices perform multiple tasks, have more than doubled in two years, as servers, gaming PCs and cryptocurrency mining devices demand more fire power to process large amounts of transmission data.

Although China is investing heavily to develop its still-nascent chip industry, it is currently the largest importer of memory products, consuming 20 percent of the world's DRAM, according to research firm Trendforce.

FILE PHOTO: SK Hynix Inc's DRAM modules are seen in this image taken at the company's main office building in Seoul on October 24, 2012. REUTERS / Kim Hong-Ji / Stock Photo [19659008] The three companies said officials from China The State Administration for market regulation had recently visited their offices.

"China (is) trying to protect its PC and smartphone market from rising DRAM costs Typically, China's PCs and smartphones are sold at lower costs / margins than those in other countries" said Stifel Nicolaus analyst Kevin Cassidy.

A spokesperson for Samsung said the company was cooperating with the Chinese authorities, but did not provide further details about the visit. A spokesman for SK Hynix also declined to give further details.

PHOTO OF THE FILE: A man shows a DRAM chip inside a computer mall in Taipei February 16, 2009. REUTERS / Nicky Loh / File Photo

The crackdown on the chip makers was to ensure competition Fair, said the Global Times, a Chinese tabloid state backed by the official People's Daily of the Communist Party.

A potential probe was first tagged late last year when Chinese state media reported that regulators approached Samsung in South Korea because of the price increase.

The DRAM sector has been a frequent target of global regulatory investigations into price-fixing allegations, as the industry has seen an avalanche of agreements that left the two South Korean firms and their US rivals controlling 96 percent of the market.

Samsung had a market share of 44.9 percent in the first quarter, while SK Hynix has 27.9 percent and Micron has 22.6 percent, according to Trendforce.

In April, they were slapped with a class action lawsuit filed on behalf of US consumers. UU For the accusations that they conspired to inflate DRAM prices.

Chinese companies have had a series of agreements abroad to buy foreign chip companies blocked by US regulators. UU In recent years, including an offer from Tsinghua Unigroup to acquire Micron Technology.

Reports of Ju-min Park in Seoul; Additional reports by Supantha Mukherjee and Laharee Chatterjee in Bengaluru, Brenda Goh in Shanghai and Joyce Lee in Seoul; Editing by Edwina Gibbs

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