Over the last year, we’ve been encountering increased reports of DRAM and NAND flash price increases. Each time, this has been chocked up to high demand and factories not being able to supply enough. However, it looks like China’s economic regulator may think there’s more to it, as a price fixing investigation has been launched.
Speaking with the China Daily newspaper (via Reuters) this week, senior official Xu Xinyu said that authorities have “noticed the price surge and will pay more attention to future problems that may be caused by ‘price fixing’ in the sector”. China’s National Development and Reform Commission’s (NDRC) Pricing Supervision Department is concerned that a number of DRAM and NAND manufacturers have coordinated to increase prices and push profits as high as possible.
This price fix would be achieved by tightening supply and watching demand grow. This would result in more money for companies like Samsung, SK Hynix and a few others. Chinese regulators have already approached Samsung on the matter, though no public comments have been made just yet.
If the NDRC finds evidence of price fixing, then government penalties could be passed down to the companies involved.
KitGuru Says: The current supply shortage is expected to come to a halt in the first half of 2018. However, it’ll be interesting to see what the NDRC discovers following its investigation. We’ll keep an eye out for future updates.