Let's assume there are only three bakeries that supply bread in a village. As it happened, more young people in the village started getting married, wedding cake orders surged, and all three bakeries shifted their ovens to wedding cake production to meet demand. Then everyday loaf bread instantly became scarce, and prices jumped as much as 10 times. Legal experts explain the logic of the lawsuit filed on the 25th against Samsung Electronics, SK hynix and Micron over alleged DRAM price fixing in the U.S. District Court for the Northern District of California with this kind of analogy. If the wedding boom is the artificial intelligence (AI) boom, the wedding cake corresponds to high-bandwidth memory (HBM) that goes into AI servers.
But the prevailing view among legal circles at home and abroad is that it is hard to see this situation as "collusion" right away. If wedding cake orders are high and the three companies each decided there was no reason to insist on making loaf bread and made similar choices, there is no legal basis to challenge that. In 2007, the U.S. Supreme Court, in the Bell Atlantic v. Twombly ruling, set a standard that to win a price-fixing case, the plaintiff needs more than mere circumstances such as "prices rose similarly," and must specifically support the "plausibility" of an agreement from the complaint stage. If this standard is not met, the case can end at the motion to dismiss stage before trial even begins.
So in actual litigation, it is difficult to raise collusion allegations based solely on the fact that all companies raised prices together. More direct evidence of collusion is needed. For example, typical signs include whether competitors exchanged sensitive information such as prices or production volumes, or whether there were real opportunities to coordinate prices through industry associations or meetings. Without such clear circumstances, if each company simply decided "wedding cakes are profitable, so I'll run my oven too," it is not subject to punishment.
◇ "If there is no proof of 'coordination among companies,' it is hard to prove collusion"
U.S. courts call this phenomenon "conscious parallelism." Literally translated into Korean it may feel difficult, but simply put, it means "if there is no evidence of an agreement, you don't punish based only on the outcome."
There have been similar lawsuits in the past. When DRAM prices surged in 2016–2017, the law firm Hagens Berman filed a similar suit against Samsung Electronics, SK hynix and Micron, but the case was dismissed—with the decision affirmed by the 9th U.S. Circuit Court of Appeals in Mar. 2022 following the district court—in a precedent that said, "the defendants' conduct is more plausibly explained by lawful parallel conduct than by collusion." The circumstances the plaintiffs presented failed to even clear the courthouse threshold.
The recent suit was filed by 14 U.S. consumers and three small PC assembly and distribution firms on the 25th in the Northern District of California. The plaintiffs claim that Samsung Electronics, SK hynix and Micron, which together hold about 90% of the global DRAM market, simultaneously cut production of legacy, commodity DRAM such as DDR3 and DDR4 under the pretext of expanding HBM output. As a result, the core allegation in the complaint is that general DRAM prices have surged about 700% over the past four years. The complaint dubbed this situation "RAMpocalypse." The plaintiffs also said Apple's recent price increases for iPads and Macs stem from this ripple effect.
Of course, the fact that memory semiconductor companies prevailed in the past does not guarantee an unconditional victory. In 2005, Samsung Electronics and Hynix Semiconductor, the predecessor of SK hynix, were found to have actually fixed DRAM prices from 1999 to 2002 and were fined $300 million and $185 million, respectively, by the Ministry of Justice, and some executives at the time even served prison terms. However, that case differs from this one in that there was direct evidence, such as emails, proving an actual agreement.
◇ Will the plaintiffs' "HBM pretext" argument clear the court's threshold
Industry watchers see the backbone of this lawsuit as almost identical to the 2018 case. As noted above, the mere fact that "prices rose together" is not enough, and there must be more explicit and direct evidence showing that the three companies actually coordinated to clear the court's threshold. The plaintiffs' new card this time is the theme of an HBM shift, and whether that can be recognized as such direct evidence is effectively the only issue in this suit. A semiconductor attorney said, "The 2018 case was dismissed because the plaintiffs failed to present evidence beyond the circumstance that 'they all behaved similarly,' and this time too, if all they have is that the timing of the HBM shift coincidentally overlapped, they may hit the same wall."
The corporations' rebuttals are not trivial. Because there is a clear market factor—an actual surge in end demand from AI servers—the logic that "prices rose not because of collusion but because real demand exploded" could be even more persuasive than in 2018, some say. There are also circumstances that bolster this view. Recently, Micron announced a large-scale expansion plan in Hiroshima, Japan, SK hynix did so in Yongin, and Samsung Electronics is also continuing to invest. If the three companies had conspired to tighten supply, there would be no reason to spend so much money now to increase capacity.
If this case clears the motion-to-dismiss threshold and proceeds to discovery, communications related to production plans exchanged within the three companies could be disclosed in court. However, given that the 2018 case failed to clear both the district court and appellate court thresholds on precisely the same logic and ended at an early stage, this suit also appears more likely to be wrapped up early without reaching a full-fledged evidentiary battle. In the end, the key question is whether the plaintiffs' "HBM card" is special enough to produce a different result than before, but judging from the trend of precedents so far, legal circles broadly view that likelihood as low.