China Claims Over Violating Anti-Monopoly Regulations By Chipmakers

China Claims Over Violating Anti-Monopoly Regulations By Chipmakers

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Chinese supervisors on the basis of an investigation have found huge evidence related to anti-competitive activities followed by the globally top three computer memory chips manufacturers by which global trade tensions could get intensified. Wu Zhenguo—head of China’s anti-monopoly bureau—said that the value-fixing investigation into US-based Micron Technology, South Korea’s Samsung Electronics, and SK Hynix had made a significant improvement, without contributing in any type of illegal behavior.

These three companies manage up to 95% of the global DRAM (dynamic random access memory) chips market. According to IC Insights—US research firm, after the continuous declining for the past three decades; suddenly in the Year 2017, the cost rate per bit of DRAM chips spurred by 47%. The price has also been increasing in the current year.

The Chinese investigation pursued a legal proceeding in the US court, which was rejected in April. As per the investigation, the three companies united to boom up DRAM prices. In 2005, the US justice department charged Samsung and Hynix with $300 Million and $185 Million for settlement against price-fixing. For overall price-fixing activities held In between the year 1998 and 2002, the EU Commission hit with the total €331 Million fine over different companies in the year 2010

According to SK Securities, The last year’s statistics have shown 51% of sales by Micron’s semiconductor, 40% by Samsung Electronics, and 33% by SK Hynix. An analyst at SK Securities warned the chip manufacturers by saying that if the companies are found to be in the activities of price-fixing, Beijing could hit fines on each company of more than $2.5 Billion. This warning by China would help in cost reduction of DRAM chips and also associates with the China-based companies to encourage the technology transfer to China.

According to an analyst at Macquarie, Chinese investigators may have an eye over Micron Technology to use it as a bargaining chip in the middle of the U.S.-China trade war.