China investigates possible price agreements memory industry

China is considering investigating last year’s price increases for dram and nand memory. The regulator in the country would suspect that the companies have made price agreements.

The regulator, the National Development and Reform Commission’s Pricing Supervision Department, is said to have started ringing alarm bells with the continued price increases for memory over the past 18 months. Reuters quoted a spokesperson as saying to the China Daily that the competition watchdog is paying more attention to problems that could arise from price-fixing in the sector.

He would also have referred to the possibility of a coordinated action by a number of companies to drive the price as high as possible. According to research firm TrendForce, the price of dram on the spot market has risen 50 percent last year, while nand prices have increased by more than 30 percent.

IC Insights calculates that the combined turnover of dram companies at the end of 2017 could be 65 percent higher than at the end of 2016. The price increases are the result of increased demand, especially for smartphones, and lagging production increases. According to Reuters, a factor is that Chinese manufacturers are struggling to get the production of 3d-nand up to standard.