US Chipmaker Micron Faces China Antitrust Probe for Alleged Monopolistic Practices
Xu Wei
/SOURCE : Yicai
US Chipmaker Micron Faces China Antitrust Probe for Alleged Monopolistic Practices

 (Yicai Global) May 25 -- China's antitrust body launched an investigation into Micron Technology Inc., world's third-largest memory chipmaker, for alleged dynamic random-access memory, or DRAM, price increases and abuse of its dominant market position to crack down on Chinese firms last year, news site Jiweinet reported today.

The Boise-based semiconductor giant imposed restrictions on supplies from manufacturers to Fujian Jinhua Integrated Circuit Co., JHICC, which brought tremendous pressure and challenges to the Chinese firm, the antitrust body reportedly said. However, no further details were available.

The continuously rising prices of DRAM in the past two years have led to substantial revenue increases for the upstream manufacturers. In addition to the record-breaking revenues and profits posted by South Korea's Samsung Electronics Co., Micron latest financial results hit a historic high. It posted a quarterly revenue of US$7.35 billion this year, up 58 percent annually.

As the DRAM market is dominated by Samsung, SK Hynix and Micron, there are reported doubts that the three giants reached a "tacit agreement" on manipulating DRAM prices.

Last month, Samsung, SK Hynix and Micron were sued in the United States for having colluded to impose restrictions on the supply of all kinds of DRAM products to the market to intentionally raise the prices of DRAM between 2016 and last year. Relevant data showed that Samsung, SK Hynix Inc. and Micron collectively controlled 96 percent of the worldwide DRAM market as of mid-last year. During the alleged period, the prices of DRAM more than doubled.

The Anti-Monopoly Law of China prescribes a presumption of dominance at a 50 percent market share, but to determine if monopoly power exists, it is not market share that counts, but whether the monopolistic practices specified in the Anti-Monopoly Law are conducted, a legal practitioner told Yicai Global.

If the investigation proves that the three manufacturers raise prices in tandem, it constitutes a monopolistic practice prohibited by China's Anti-Monopoly Law, the practitioner said. Moreover, Micron's restriction on supplies from manufacturers constitutes a restraint of trade, which is in violation of relevant provisions in China's Anti-Monopoly Law.

Editor: Mevlut Katik

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Keywords: US , Micron Technology , DRAM , Fujian Jinhua Integrated Circuit , Antitrust