A global surge in memory prices is escalating into a legal battle. The three chip giants that dominate the global DRAM market—Samsung Electronics Co., Ltd., SK Hynix, and Micron Technology—were hit with a class action lawsuit last week in a US federal court. They are accused of colluding to restrict production of traditional DRAM under the guise of a strategic shift towards high-bandwidth memory for artificial intelligence, allegedly causing prices to soar by approximately 700% over the past four years.
The lawsuit was filed on June 25 in a California federal court, with plaintiffs representing consumers and businesses who purchased commercial DRAM products during the recent price increase cycle. The complaint cites Apple's recent broad price hikes across its iPad and Mac product lines as a direct example of harm, viewing it as a catalyst for the lawsuit. It accuses the three companies of coordinating to cut production of legacy memory like DDR3 and DDR4, artificially creating a supply shortage and price surge akin to a "RAMpocalypse."
This case has historical precedent. Samsung Electronics Co., Ltd. and SK Hynix previously pleaded guilty to criminal price-fixing charges brought by the US Department of Justice in the 2000s, paying a combined $731 million in fines and seeing several executives sentenced to prison. The lawsuit explicitly references this record, attempting to establish a pattern of long-term collusion by the three companies, thereby strengthening the legal foundation of the current allegations.
For investors, regardless of the lawsuit's outcome, high memory prices are unlikely to reverse in the short term. Jefferies forecasts that memory prices will rise another 40% to 50% quarter-on-quarter in Q3 2026, followed by a further 30% to 40% sequential increase in Q4. For the full year 2027, prices are still expected to be up 40% to 45% year-on-year, with a significant slowdown not expected until 2028 at the earliest. This suggests downstream companies and end consumers will face sustained cost pressures for a considerable period.
Core Allegations: HBM Transition Accused of Masking Supply Restriction
The lawsuit's central argument is that Samsung Electronics Co., Ltd., SK Hynix, and Micron Technology, leveraging their oligopoly in the global DRAM market, have coordinated their shift towards HBM while using this strategic adjustment as a pretext to significantly cut production of commercial memory like DDR3 and DDR4, artificially creating a supply contraction. According to data cited in the complaint, this coordinated action has led to a cumulative price increase of about 700% for commercial DRAM over four years, broadly impacting global consumer electronics and commercial IT procurement.
Apple's recent broad price increases for iPads and Macs are cited by plaintiffs as a classic case of price transmission: the supply shortage created upstream by the three manufacturers has been passed down through the supply chain, ultimately landing on end consumers.
The legal basis for this lawsuit is not without foundation. Samsung Electronics Co., Ltd. and SK Hynix formally pleaded guilty in the 2000s to criminal price-fixing charges brought by the US Department of Justice, paying the combined $731 million fine and having several executives imprisoned.
The lawsuit references this history to present to the court a pattern of systematic and repeated collusion by the companies, aiming to bolster the credibility and legal force of the current charges. Compared to defendants facing such charges for the first time, this prior record provides plaintiffs with a stronger reference point and subjects the defendants' defense to higher public relations and legal costs.
Price Outlook: High-Price "New Normal" May Last Until 2028
Running parallel to the lawsuit are ongoing pessimistic market expectations for memory price trends. Several companies, including Lenovo, have publicly stated that high memory prices will become the "new normal." Analysts note that such statements may also have the commercial motive of encouraging consumers to place orders early and avoid waiting.
Jefferies' forecast is more specific: the firm expects memory prices to rise another 40% to 50% quarter-on-quarter in Q3 2026, followed by a further 30% to 40% sequential increase in Q4. For 2027, full-year prices are projected to increase another 40% to 45% year-on-year, with a material slowdown not expected until 2028 at the earliest. For downstream companies and end consumers, the continuous rise in memory costs will keep transmitting to final product pricing over an extended period, putting ongoing pressure on the cost structures of consumer electronics, servers, and enterprise IT procurement.
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