S. Korean, American Chipmakers Investigated in China

China is conducting an investigation into price-fixing allegations against Samsung Electronics, SK Hynix and Micron Technology, which are the three largest memory semiconductor manufacturers in the world.

The Ministry of Commerce of China summoned a Micron Technology executive on May 24, expressing concerns over an excessive rise in memory semiconductor prices that has continued for quarters and pointing out that unfair competition based on an abuse of market dominance should not happen in any case. On May 31, the Anti-Monopoly Bureau of the State Administration for Market Regulation (SAMR) raided the three companies’ offices in Beijing, Shanghai and Shenzhen for investigation purposes.

Established in March this year, the bureau is a powerful market supervisor organized by the National Development and Reform Commission (NDRC), the Commerce Ministry and the State Administration for Industry and Commerce. The ongoing investigation is the bureau’s first large-scale investigation.

According to experts, the probe has been triggered by Chinese clients’ complaint about the rapid increase in memory semiconductor prices. Late last year, Chinese smartphone manufacturers filed a complaint with the NDRC that chip prices were continuing to rise amid an insufficient supply. Then, the NDRC told Samsung Electronics and SK Hynix to refrain from marking up the prices and summoned Samsung Electronics executives.

The investigation is to keep the industry leaders in check, too. Chinese President Xi Jinping visited XMC, a subsidiary of YMTC of Tsinghua Unigroup currently preparing to manufacture NAND flash memory chips, on April 26 to stress the importance of domestic high-tech product procurement. In addition, the Chinese government clarified last month that it would purchase domestically produced semiconductor servers in public IT product procurement for 2019. Concerning the acquisition of Toshiba Memory by a South Korea-American-Japanese consortium, the Chinese government gave its approval only recently, after procrastinating for eight months, to check the South Korean and U.S. semiconductor manufacturers.