Three companies that account for 90% of RAM revenue are being sued for anti-competitive practices.
The big story in computing these days is how an ongoing shortage of RAM (dubbed RAMageddon or the RAMpocalypse) has led to massive increases in hardware costs. The conventional explanation of the situation has been that shortages have been driven by the widespread construction of AI data centers. However, a new lawsuit (Garciaguirre et al. v. Samsung Electronics Co., Ltd., et al.) filed against RAM manufacturers Samsung, SK Hynix, and Micron, alleges that these companies are exploiting market conditions to artificially inflate prices.
The class action lawsuit filed by 14 individuals and three businesses accuses Samsung, SK Hynix, and Micron of conspiring to fix prices and supply of DDR3 and DDR4 RAM, resulting in higher costs. "This lawsuit seeks to recover for—and stop—concerted anticompetitive behavior by three oligopolists in the market for dynamic random access memory, more commonly called DRAM," the opening line of the suit reads.
DRAM is essential for virtually every computing device, as it stores the bits used for short-term data. Samsung, SK Hynix, and Micron account for more than 90% of global DRAM revenue. The suit says that the firms have "fixed supply and prices for DRAM, engaging in conduct that makes no economic sense absent collusion and that has driven up the price of conventional DRAM (sometimes called commodity DRAM) approximately 700% in a four-year period."
[Source]: Polygon.Com
Do you agree that these companies are colluding ?
(Score: 4, Interesting) by krishnoid on Friday July 03, @08:51PM (6 children)
I say they move the courtroom for pretrial, etc. to the wafer fabrication floor. If they're not spending something like every dime on expanding manufacturing capacity, sure, I'll consider it.
(Score: 3, Insightful) by Snotnose on Friday July 03, @11:27PM (5 children)
RAM is a boom and bust business. They don't want to invest a lot and be holding the bag when the bust comes.
When the AI bubble bursts RAM will suddenly be cheap again.
Of course, if you don't think there is an AI bubble and RAM consumption will only grow, then build those fabs!
Trump's Grave will be the world's most popular open air toilet.
(Score: 2) by aafcac on Saturday July 04, @04:26AM (2 children)
It is, but at this point do we really need faster RAM modules for typical users? Faster RAM is nice, but for most people the things we're doing with the RAM don't really benefit that much from more speed. And having the somewhat slower modules available for longer should help a bit in terms of the extra capacity.
(Score: 0) by Anonymous Coward on Saturday July 04, @05:44AM (1 child)
Gaming.
(Score: 2) by aafcac on Saturday July 04, @07:32PM
Gaming benefits from it, but gamers expecting that level of performance have always been willing to pay for it. The costs of some of those rigs are truly eye-watering. The whole notion though that you have to have such expensive gear to game at this point is downright silly. The graphics peaked like 10 years back, and we're more bound by the costs associated with generating enough high res assets to fill the games than the computers that gamers are running. I wouldn't expect us to have another game like Crysis being released that can saturate the capacity of computers not yet made.
(Score: 2) by krishnoid on Saturday July 04, @07:05AM (1 child)
Hell, when the next upgrade cycle hits, used RAM from those retired servers should be cheap again, right?
(Score: 3, Insightful) by Bentonite on Tuesday July 07, @05:22AM
Maybe, but the reason it is cheap is because it's hard to use - you need a server board to use ECC DDR3 RDIMM's for example.
Resellers in the past would have defaulted to setting high prices for server RAM and sold nothing and therefore had to set low prices to sell.
There also has been a glut of cheap new DDR3 by budget Chinese brands, which sets a price roof for used DDR3 in many cases.
Now that DDR4 equipment is not being resold to budget Chinese brands and how older servers now tend to use more standard DDR4 DIMM's, that are likely to work in many non-server motherboards, I don't think that used DDR4 is going to be as cheap.
Also, I suspect many datacentres may choose to skip the next upgrade cycle, as it seems the cost of the newest hardware exceeds the possible electrical cost savings.
(Score: 5, Insightful) by Anonymous Coward on Friday July 03, @08:51PM (2 children)
I have NO idea, no facts, so it's not an "agree" situation. I agree that it's well worth investigating.
Years ago my sister dated a guy who was a major sales VP for a major soaps and other consumables company. He had no problem admitting that all of the manufacturers (P&G, Ajax, Unilever, Church & Dwight, Armstrong, etc.) all called each other almost every day and collaborated on wholesale prices.
(Score: 5, Interesting) by chucky on Friday July 03, @09:56PM (1 child)
There doesn’t even need to be a cartel agreement. The manufacturers may be expecting the AI bubble to burst. Building a new factory costs money and takes time. If you build a new factory, produce more and make the product cheaper, then you maybe gain market share, but lose money per unit. What would they do with the new plants if the demand drops? They have to see that the growth is sustainable. If they don’t, they’ll just milk the cash cow: “Sorry, we’re producing 100% already, can’t do more. If you want your chips earlier, then pay extra.” Margins through the roof, shareholders happy… They can even do this without talking to each other. I’m not that naive, they probably do, but they don’t need to. It’s enough to watch each other. To succeed in a lawsuit, one has to bring evidence. And they know it too.
(Score: 3, Insightful) by Anonymous Coward on Saturday July 04, @12:36AM
Yes, and I've always know that. That's free-market economics. And those dynamics work well when you have many manufacturers.
However, what we have in RAM is oligopoly- a few big manufacturers in a big strong market. Insurmountable investment needed to enter RAM manufacturing market. Point is, it's a very fragile thing economically, which means the repercussions of collaboration are much more significant.
(Score: 4, Insightful) by looorg on Friday July 03, @09:17PM (13 children)
Do bears shit in the woods?
While I don't know they are colluding nor do I believe that they are sitting in some dark room twirling their mustaches and laughing maniacally. I just assume none of them mind the current situation where they are making money like never before for doing nothing more then they did before. They probably like this situation and want to keep it going for as long as they can. So if just none of them rock the boat to much they keep doing that.
Is that colluding even if they don't meet or planned it? After all the almighty market should have corrected these things. If there is excessive amounts of money to be made others should enter the market to take part or they should all ramp up production or something. Instead they are probably creating an artificial scarcity. $$$ and everyone except the end customers are happy.
(Score: 2) by JoeMerchant on Friday July 03, @09:41PM (8 children)
When a bear shits in the woods but nobody sees it happen, can you prove the bear did it? Remember: bears (and corporations) have extreme rights to privacy...
🌻🌻🌻🌻✌️ [google.com]
(Score: 5, Insightful) by looorg on Friday July 03, @09:49PM (7 children)
While I have never seen a bear take a dump in the woods I have seen the evidence of the action. I have ruled out, most, the other animals. Ockham tells me it was the bear, or well knowledge of what animal poop looks like does it to.
Still I would be more surprised if they did not actually collude. I just assume they do. Even if it's not active collusion. What is weird is that nobody else appears to be stepping in there. There appears to be a market segment for consumer grade and appliance RAM that is not being filled cause the three top dogs are all trying to produce for AI data centers. Companies that produce other chips or used to produce chips of their own etc. After all they don't need to be the state of the art etc if they go into consumer grade products. Companies that bowed out cause they couldn't anymore produce at the tiny scale or had the money to R&D the next level thing. Why isn't Phillips, Siemens or anyone else that needs chips for their consumer grade products stepping in or up? It might be, or probably is, a cost thing. They are just hoping that this shit fest will end "soon". But it probably isn't going to.
(Score: 3, Funny) by aafcac on Friday July 03, @10:05PM (1 child)
That's where you're wrong, it was the Pope.
(Score: 3, Funny) by Fnord666 on Sunday July 05, @07:50PM
I suppose you're going to say the bear's Catholic next.
(Score: 2) by JoeMerchant on Saturday July 04, @01:16AM (3 children)
>Ockham tells me it was the bear
Does the learned magistrate recognize Ockham? Occalm might stand a slightly better chance with a judge, but how do you think that would fare with "a jury of our peers"?
🌻🌻🌻🌻✌️ [google.com]
(Score: 2) by looorg on Saturday July 04, @09:35AM (2 children)
Will there be bears in the jury to?
(Score: 2) by JoeMerchant on Sunday July 05, @01:54AM (1 child)
"There is considerable overlap between the intelligence of the smartest bears and the dumbest tourists."
🌻🌻🌻🌻✌️ [google.com]
(Score: 2) by looorg on Sunday July 05, @10:22AM
Grand Theft Picknic Baskets.
(Score: 3, Interesting) by Bentonite on Tuesday July 07, @05:34AM
Phillips, Siemens or anyone else that needs chips for their "consumer grade products" doesn't have fabs that can produce DDR4 or DDR5 - after all, those cost billions and have a lead times of years.
Most of such hardware seems to use DDR3 - as low power consumption is wanted, high clocks are ruled out and on a clock-for-clock basis, DDR3 is not significantly slower than DDR4 or DDR5.
For some reason, the price of 512MB integrated DDR3 is significantly higher than 1GB integrated DDR4?; https://www.dramexchange.com/ [dramexchange.com]
It can only be explained by price fixing, considering that LLM hardware generally doesn't use DDR3.
I suspect big companies aren't concerned about DDR3 spot prices, as they have fixed price contracts with DDR3 fabs.
(Score: 0) by Anonymous Coward on Friday July 03, @10:32PM
Apparently you do not know if nor believe that bears shit in the woods!
(Score: 5, Insightful) by bzipitidoo on Saturday July 04, @12:46AM (2 children)
> sitting in some dark room twirling their mustaches and laughing maniacally
They don't have to meet or talk to each other to collude. They signal each other with their price changes, and lying press releases excusing the price hikes. When one of them says there's a shortage, and blames it on whatever, the others will decide for themselves if that excuse will fly, and if they think it will, then they raise prices too. The maniacal laughing is entirely private. Probably giggle that there is no smoking gun showing that they have colluded, because they haven't put anything into words.
2009 was the Year of the Flat Screen. It would have come sooner, but flat screen manufacturers were colluding. For most of the 2000s, there were no screens to be had for under $100. Prices wouldn't budge. While all other tech became better and cheaper, flat screen prices stayed high. The abnormality was eventually noted, and action taken. In the 2010s, flat screens spread like wildfire. To this day, I still marvel at how many giant flat screen TVs the average sports bar has now.
(Score: 2) by Thexalon on Saturday July 04, @01:13AM
Indeed, game theory of oligopolies has always been that, in all businesses. That's why air fares often have more to do with which other carriers fly to an area than the distance of the flight or airport fees, for instance. When company A raises their price, companies B, C, and D have a choice to either also raise their price or try to compete for company A's market share. But competing would yield a price war that reduces profit for all companies involved on a short-term basis, whereas raising the price in line with company A's price range means that all industry players can show their shareholders increased profits and everybody* wins.
* "Everybody" in this context is not to be construed as meaning customers, employees, or any other insignificant players in this game.
"Think of how stupid the average person is. Then realize half of 'em are stupider than that." - George Carlin
(Score: 3, Funny) by krishnoid on Saturday July 04, @07:09AM
Is this how bridge works? I never really got the hang of that game.
(Score: 3, Funny) by SomeGuy on Saturday July 04, @02:46AM
If some rich investor with no brains wanted to throw piles of money at me for whatever product or service I was providing, I would probably want to up my prices too. Get as much of that money as possible before the bubble bursts. You are competing with me? Just up yours too. So we can shove it up theirs!
"They give me money. I like money."
(Meanwhile, this and all the other crazy stuff going on in the world is causing prices in general to blast of out of this multiverse)
(Score: 4, Insightful) by Frosty Piss on Sunday July 05, @02:52AM
This is ordinary and expected behavior for late stage capitalists. Ethical behavior is unknown to them. They squeeze their customers as hard as they can, and stop just before reaching the point where the customer will turn and go away. In some cases they go too far and they are like the parasite that kills its host. It reminds me of the French Revolution, in which the noble classes went beyond the point of no return and their host turned and brought out the guillotines.
(Score: 1) by Runaway1956 on Sunday July 05, @05:45AM
I remember the 386 through the Super Socket Seven days. Memory was freaking EXPENSIVE!! It was quite a large expenditure for me to build my first computer with a gig of memory. That was an AMD 450 mobile CPU on the Super Socket Seven motherboard. Today, I have a build in the works on an AM4 platform, AMD Ryzen™ 9 5900XT. and 64 gig of memory is going to be similarly expensive. Maybe the manufacturers are colluding, I don't know. But the ages old rules of supply and demand probably have something to do with it.
HOLY SMOKES! They want $500 for one of those old mainboards now! Claims to be "new", others, used, range from $100 to $300. https://www.ebay.com/itm/127954585541?_skw=super+socket+7+motherboard [ebay.com]
And, yes, I do like to overprovision computers with plenty of memory. I guess it's possible to have too much memory, but I've never seen a computer freeze up or stop working properly because it had too much memory to work with.
We're gonna be able to vacation in Gaza, Cuba, Venezuela, Iran and maybe Minnesota soon. Incredible times.