DRAM Prices Soared 700%: Are Samsung, SK Hynix, and Micron Running a Cartel?

Nearly every smartphone and laptop on the planet relies on a type of memory chip known as DRAM. Now, a federal lawsuit filed in California is accusing the three dominant manufacturers — Samsung, SK Hynix, and Micron — of deliberately restricting supply to drive prices up. The timing is striking: the lawsuit emerged just days before those very same companies announced a jaw-dropping $650 billion investment plan, which they attributed to surging demand from the artificial intelligence sector.

The core allegation is straightforward but serious. Plaintiffs claim the manufacturers used the so-called "AI boom" as a convenient smokescreen to divert production capacity away from standard consumer memory toward premium AI-grade chips, which command significantly higher profit margins. The result, according to the lawsuit, was an artificial scarcity that sent ordinary DRAM prices skyrocketing between 500% and 700% over roughly four years.

This is not the first time these companies have faced such accusations. In 2005, Samsung pleaded guilty to memory price-fixing and was slapped with a $300 million fine — the second-largest penalty of its kind in US history at the time. Several executives were imprisoned. The new lawsuit alleges that, following those convictions, the companies eventually rehired some of the very same individuals involved in the original scheme.

The plaintiffs in the current case include 14 individual consumers and three small computer retailers. One of the law firms representing them, Hagens Berman, is notable for having secured the settlement in the original 2005 price-fixing case. The case is being heard in a California federal court.

The mechanics of the alleged scheme are straightforward. AI-optimized memory chips fetch far greater prices than standard DRAM. The lawsuit contends that by redirecting manufacturing capacity toward AI chips, the companies engineered a shortage of consumer-grade memory, allowing prices to climb dramatically without any meaningful competition entering the market. That last point is critical — Samsung, SK Hynix, and Micron collectively control roughly 90% of global DRAM production. Constructing a new semiconductor fabrication facility requires upward of $15 billion and can take several years, making any new competitor an extremely unlikely short-term solution.

The companies, for their part, insist the spending plans are proof of genuine demand rather than market manipulation. Samsung Group pledged approximately $650 billion in investment over the next decade, while SK Group announced a comparable chip expansion initiative. Between them, Samsung and SK Hynix account for around 80% of the specialized memory used in AI infrastructure. Both companies plan to build two new factories each.

Micron's situation draws particular scrutiny. In December, the company quietly discontinued its well-known Crucial consumer memory brand after 29 years — right at the moment when retail prices were peaking. The company justified the move by saying it needed to focus resources on larger strategic customers in high-growth segments. Critics, including the lawsuit's plaintiffs, view this differently: why abandon a profitable consumer line at the height of its earnings potential, unless the goal is to shrink supply?

Financial markets responded cautiously to the lawsuit's emergence. Samsung shares fell 5.3%, while SK Hynix dropped 3.4%. Consumers are already feeling the pinch — Apple has reportedly begun raising certain product prices to offset elevated chip costs.

Analysts at Jefferies project memory prices will climb approximately 50% in the current quarter and another 40% in the following one, with no meaningful price relief expected before 2028.

Legal history does not favor the plaintiffs. Two previous attempts to bring similar lawsuits failed, with courts determining that rising prices alone are insufficient evidence of coordinated planning. This time, however, plaintiffs argue they have a stronger case — pointing to the same companies, the same product category, and in some instances, the same executives who were previously held criminally responsible.