DRAM Vendors Reportedly Facing Hefty Antitrust Fines in China

Discussion in '[H]ard|OCP Front Page News' started by Megalith, Jun 23, 2018.

  1. Megalith

    Megalith 24-bit/48kHz Staff Member

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    Samsung Electronics, SK Hynix, and Micron Technology are being investigated for price fixing in China and will face fines of up to $8 billion if found guilty due to the country’s antitrust law. The rising cost of DRAM since 2017 had drew the attention and intervention of China's Anti-Monopoly Bureau of Ministry of Commerce, but prices kept going up regardless.

    China has become the largest consumer of DRAM memory. The country imported US$88.92 billion worth of memory chips in 2017, up nearly 40%. As a result, China's antitrust authority is being encouraged to launch a price-fixing probe like the one that took place in the US in 2002, after receiving a complaint submitted jointly by China's local smartphone and other consumer technology product vendors, the sources said.
     
  2. Kyle_Bennett

    Kyle_Bennett El Chingón Staff Member

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    There are a lot of places I do not want to have legal action against me, but China tops the list.
     
  3. Twisted Kidney

    Twisted Kidney 2[H]4U

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    Yeah, you don't get to have an "act humble while the politicians grand stand" day in China. You do get to go to prison though, that's probably fun, right?
     
  4. SixFootDuo

    SixFootDuo [H]ardness Supreme

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    Well said.

    I would have bought more memory here and there ( as well as everyone else ) had memory remained affordable. I've literally spent every single day looking and buying up used memory to save $50 - $100 nearly any chance I got.

    There is a popular YouTube vlogger called SerpentZa that lives in and talks about China and he has said more than once that it's virtual unheard of for anyone, especially foreigners, individuals and companies to win any legal action brought against them in China. These companies are going to pay, that's guarantee.
     
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  5. [21CW]killerofall

    [21CW]killerofall Aliens...

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    That's assuming you aren't executed for your crimes, which has happened in the past in China.
     
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  6. umeng2002

    umeng2002 Gawd

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    Don't they have the death penalty for large-scale corporate corruption?
     
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  7. EVIL-SCOTSMAN

    EVIL-SCOTSMAN [H]ardness Supreme

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    Why ?

    If legal action was taken against you in china and none criminal.

    Couldnt you just not give a shit about it ?

    Whats the worst that could happen.

    Its not like the states will extradite you to China and doubtful that for example, the courts in china decided you owed them 8 billion, it doubtful they could make you or an american bank to pay up ?

    Or am I missing something ?
     
  8. Uvaman2

    Uvaman2 2[H]4U

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    I think they do.
     
  9. Aireoth

    Aireoth [H]ard|Gawd

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    China fining for antitrust, that's rich.
     
  10. Twisted Kidney

    Twisted Kidney 2[H]4U

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    Nah, not when they want something. The justice system as a ransom scam is more effective when the hostage is alive.
     
  11. workshop35

    workshop35 Limp Gawd

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    I have a feeling that it wont matter if the accusations are true or not
     
  12. Master_shake_

    Master_shake_ Little Bitch

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    i hope the threat is enough for the collusion to end.

    this is beyond fucking bullshit.
     
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  13. SickBeast

    SickBeast Limp Gawd

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    Wow, $8 billion. Not bad. I was expecting the Chinese government to treat them with kid gloves. Now we just need an ethical company to open up a DRAM factory.
     
  14. [21CW]killerofall

    [21CW]killerofall Aliens...

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    You see, you can't kill a corporation (unless you dis-ban it). If this is due to corruption, a few executives' heads will roll (aka be put to death) AND they will fine the companies.
     
  15. Twisted Kidney

    Twisted Kidney 2[H]4U

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    China generally doesn't like to kill corporations, just subvert them.

    Not that I'm saying you're wrong, China executes as many as 10,000 people per year, you're probably right.
     
  16. Chunder

    Chunder Limp Gawd

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    The Chinese government doesn't mess around. Unlike America, they actually punish these companies proportionally based off their value/what they stole and prosecute CEO's that knowingly participated in it. Here in America, you can have the big banks steal billions from its citizens, then get slapped with a "massive" $800 million fine and no one goes to jail, and then we wonder why these banks do it again a few years later.
     
  17. alamox

    alamox Limp Gawd

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    i hope it's 8B$ per manufacturer, because 8 B$ for the 3 of them isn't nearly enough
     
  18. Private_Ops

    Private_Ops [H]ard|Gawd

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    I have a love hate relationship with our country. Stupidity, corruption, greed. Yet we are some of the most "free" people on the planet.
     
  19. SixFootDuo

    SixFootDuo [H]ardness Supreme

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    I hope all these companies are massively fined. I do not give AF.

    I've known from day one they were doing this.

    This is hurting everyone. Ask the guys at Microcenter. Memory prices are having a huge effect on those guys making money. I've been told their commissions are as much as 1/3rd off vs a year prior.
     
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  20. Makaveli@BETA

    Makaveli@BETA 2[H]4U

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    That's because the state has already determined the verdict before you even step into court.

    These companies deserve it though won't shed a tear for them.
     
  21. Lumpus

    Lumpus Limp Gawd

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    And then next year they all raise prices 20% more to cover the costs due to paying the fines... aka passing them back to the consumer
     
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  22. RealBeast

    RealBeast Limp Gawd

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    And you think that if China takes billions from these manufacturers that your price in the US/EU won't increase to pay the huge fines? Think again.

    And while I'm on the topic of China: Fuck China, they steal every scrap of IP that they can worldwide. They deserve every bad thing that could happen to them, commie bastards! /rant ;)
     
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  23. SixFootDuo

    SixFootDuo [H]ardness Supreme

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    Oh I really could care less. I actually give a fuck about my money so I will always be resourceful enough to work at saving money where I can. Meaning, none of this will most likely not effect me. I have no problem buying memory 2nd hand.

    But let's try some different logic. There are two ways companies make money. Up front on via the long game. The long game, they charge less, break less rules, the customer get's a good value and everything is cool ... other than, it took the company 3 years to get the profits they could have gotten in one year. with the money up front scheme, they make up their bullshit lies about demand along with tales of fires, natural disasters, acts of god, power failures, etc on top of working behind closed doors with other memory manufactures to artificially keep prices high. We know they chose the later.

    My thought is this, perhaps when all the billions of dollars in fines are levied against these assholes that they were take a moment to reflect on their evil behavior and consider their options and instead play the long game.

    You know, Coke, Pepsi, Ford, countless other companies world wide used to play the long game with their profits. Great product, fair price, steady profits. Not so much any more. It's how we can have massive massive profits day one.
     
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  24. lostin3d

    lostin3d [H]ard|Gawd

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    I agree. Unlike in the U.S. where bank execs and CEO's get to pose for congress and the press, get some kind of slap and usually no real time, China will throw their butts in jail. Not afraid to take control of the company after either.
     
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  25. Maxx

    Maxx [H]ard|Gawd

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    You bribe wrong person...you bribe right person now! *insert racist Asian accent*
     
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  26. Maxx

    Maxx [H]ard|Gawd

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    Ostensibly the fine is to cover costs incurred/lost due to price fixing. Your implication is that this alleged behavior was somehow done in a zero-sum fashion whereby it led to proportionately decreased prices elsewhere. Or rather, you paint it as a fine to deter other companies (which is usually the case in the U.S. but not so much in China) where any such fines will be proportionately paid by higher margins in other regions (and how exactly will that happen without price-fixing in notoriously litigious places like the EU?). If you have no idea what I'm getting at...it's that this is simply the price of doing business in China and China getting its cut, any earnings as such are in excess of normality and not subject to traditional market effects (for example, breaking a monopoly generally is done in the interest of LOWERING prices for consumers).

    That being said...I agree that China is a major IP thief (assuming you're not being sarcastic) but I feel you are being sarcastic in calling them communists as really "red capitalists" is more fitting.
     
  27. workshop35

    workshop35 Limp Gawd

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    I have yet to see one shred of evidence of price fixing. I dont like the memory prices as much as the next guy but "i just know" is not going to prove anything. And "they've done it before" is almost as bad.
     
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  28. mesyn191

    mesyn191 2[H]4U

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    That is only if those CEO's aren't "friends" with the right people though. Otherwise they'll walk over there too. Punishments are only harsh over there for people who piss of someone important.

    Unfortunately the situation in the US is indeed becoming ever more similar to that. But still you wouldn't see a very high ranking politician over there like say Xi Jinping getting investigated over there for anything ever. Not unless he fell out of favor with the party anyways. In which case its more like "investigation".
     
  29. Maxx

    Maxx [H]ard|Gawd

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    Perhaps an analogy. Let's say you're the only seller of weed at your high school. You can charge by amount with reductions for bulk. No problem. Then let's say a 2nd seller comes into the picture. In a normal market, this usually drives prices down, but in an illegal or black market there is more often some price agreement ("fixing"). Usually in cartel form but many people associate cartels with drugs which is a narrow view. Memory isn't illegal, of course, but in many ways its market is similar. The recent price spike was due mostly to cryptocurrency which, as we know, is often associated with illegal activity. Furthermore, the memory market follows Chinese (or rather, Asian) market patterns, where you have a practically fungible resource coming off more or less controlled production lines (OPEC, btw, is similar, which is why it's often labeled a cartel). So your insinuation that's it's more of a bribe than anything is...well, accurate, as it's rampant to the point of expectation in China (and other Asian markets). By Western standards it is absolutely price fixing, in Asian terms it's more "business as usual" with someone not getting their cut - which is unsurprising as economies like Russia and China are essentially criminal enterprises writ large.
     
  30. Mozgus

    Mozgus n00bie

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    The cost of RAM is the biggest reason I'm still running the same motherboard for 9.5 years now, topped off with a core i7 980x. The only way to step up further would be to bridge a couple solder points on this board to force it to accept a slightly better Xeon CPU. But fuck me if I'm gonna pay like $180 for a tiny memory boost in jumping to a new socket generation.
     
  31. zerogg

    zerogg Limp Gawd

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    it is truly insulting what ddr4 costs now, especially now that we have great processors like the 16 core threadripper for less than 1000$.
     
  32. Uvaman2

    Uvaman2 2[H]4U

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    Well lets see, years of cheap good, has us accustomed to prices that drop, on goods that are hard manufacture and have high barriers of entry. Years of outsourcing by companies too greedy to not have anything but mega profits, had the Chinese building factories and advancing their knowledge, while we whine about them stealing our shit. Now we are going to go nuts and tarrif shit like demented people, in the billions... So just who the fuck pays the taffifs? China? Oh no its just like whining and whining about taxes to corporations, they'll just pass the tariffs on to the customers, its just even worse than taxes to corporations, see taxes to corporations go to their profits, taffis go to whatever material or product, like a sale tax. one (corporations taxes) can be a hit to profits alone if markets dont allow price increases, the other is almost assuredly to be built in the prices, since its a tax specifically designed to do so. So we know these products are hard to make, require mayor investment.. yet we want prices, which we probably know don't even cover its cost, plues we want the Chinese to remain stupid, plus we want to fuck them with taffifs... Ladies and gentlemen... We might be looking at looking at the last days of cheap computer components. Yes 500$ video cards are a bargain and 2gb memory sticks at 100$ may become what we will be wishing for soon enough. But hey normally the sayin goes can't have it both ways.. so what happens when you want to have it 3 or 4 ways... I guess you get fucked too.
     
  33. workshop35

    workshop35 Limp Gawd

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    I don't think you can tie the memory market to illegal activity by saying crypto uses memory, has been used illegally, therefor memory is similar to an illegal/black market. There's a whole separate off-topic discussion we could have about crypto and it uses.

    From what I understand, capacity is the issue at hand here. You have phones for example using far more memory than before. You have smart tv's, smart refrigerators, smart cars, smart home systems, the list goes on and on. All of these require memory. Then you have the recent push for nand products to replace mechanical drives in data centers which is also consuming capacity. There's more fabs coming online in the next few years so we'll see how the market turns out. As nand production gets a boost from increased capacity maybe they will retool some back to dram. Who knows though, I think they will keep charging as much as they can until the market won't stand for it anymore. Which is pretty much how everything is going these days.

    I'm sure the big 3 understand each other to the point where they realize if they play nice somewhat then they all will benefit. But until I see leaked documents or emails specifically showing deliberate intent and collaboration I'm not buying it.
     
  34. mesyn191

    mesyn191 2[H]4U

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    If they didn't have a history of colluding to fix prices that would be a reasonable view but since they do it doesn't seem reasonable to think this way.

    Remember, corporations aren't actually people and so don't deserve the benefit of the doubt once they decide to start doing shady stuff since these sorts of decisions are the result of several groups of BoD's deciding to work together and do said shady stuff in particular. Its a culture of corruption you have to recognize and deal with harshly to stamp out.
     
  35. workshop35

    workshop35 Limp Gawd

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    history != guilt. The market is a completely different beast right now.
    I saw this video a while back, seems like a pretty reasonable explanation
     
  36. mesyn191

    mesyn191 2[H]4U

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    The same excuses were given the other times they were colluded too. (edit) And again corps aren't people so no benefit of a doubt is reasonable here.

    You wouldn't trust me if I lied to your face multiple times and stole money from you so why exactly are you so determined to defend and/or trust these guys now?

    Makes no sense no matter whose vids you link to that try to half assed guess the market situation through.
     
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  37. seanreisk

    seanreisk Limp Gawd

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    Oh no! They ARE people, and we should respect their peoplishness!
     
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  38. workshop35

    workshop35 Limp Gawd

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    I just want some evidence before I pronounce guilt instead of believing something because I'm angry about prices. It's quite possible that there was price fixing, corps are corps after all. But give me some proof first.
     
  39. aaronspink

    aaronspink [H]ard|Gawd

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    That's only if you are out of favor with the government. If you are in favor, you can run over people in the streets and get a promotion for it. I think you are confusing a justice system with a dictators strong man tactics. The actual rule of law isn't so much a thing as a weapon in china.
     
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  40. mesyn191

    mesyn191 2[H]4U

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    Again we both know you'd never want to see evidence that I was lying to you if I'd done so before hand multiple times. You'd dismiss me out of hand since I'd have pissed all over your goodwill multiple times in the past. Past behavior counts for something.

    And for what its worth the lawsuit being brought by Hagens Berman against the DRAM producers says they have some written evidence. The actual lawsuit has been public for months now too. So I don't really believe you when you say you want evidence here at all. Why exactly is none of the information in it, much of which is direct quotes from the companies in question, considered as evidence in your book? Bear mind that its already in a legal document and will be used in a court of law.

    Heck there is even a section helpfully titled "Throughout 2017, Defendants repeatedly reassured each other that, unlike in previous periods, each would not respond to rising prices and strong demand with increased supply growth. Instead, the Defendants would stick with their publicly announced plans to keep supply growth below demand growth by not adding wafer capacity and not seeking to take market share from each other" in the lawsuit. Go read that section. (edit) Full of quotes by the execs saying stuff like:
    The lawsuit practically hand holds you describing through the whole scam.

    Also you do understand that seanreisk was being sarcastic right? Yeah he links to a good article on the legal history of corporate personhood but even the article is quite clear its only from a legalistic perspective. They still aren't actually people. And you can't reasonably treat or consider them as such, since you know, they aren't actually people.