The DoJ will not disclose the nature of the investigation, but observers speculate that volatile pricing changes in the memory market and the unison with which players adjust prices has raised the question of collusion. Although companies such as Micron Technology, Samsung Electronics, Hynix Semiconductor and Infineon Technologies are fierce competitors, some believe the companies are illegally cooperating in order to salvage profits in this cut-throat business. Together, the companies hold approximately 75% of the DRAM market.
A spokesman for the US office of German DRAM maker Infineon confirmed that the company received a subpoena from the US District Court for the Northern District of California and intends to cooperate fully with the investigation. A pair of Taiwanese companies, Nanya Technology and Winbond Electronics, have also been served with subpoenas, according to news reports, as well as Japanese manufacturer Elpida Memory, a joint venture between NEC and Hitachi.
These companies join Micron and the US division of Korean DRAM maker Hynix, which both confirmed they have been served with subpoenas. Samsung, the world's largest memory chip maker, is also reportedly involved.
A spokeswoman at the DoJ confirmed that the antitrust division is conducting an industrywide investigation, but declined to comment further.
Speculation is mounting that the DoJ is looking into collusion on memory chip pricing, which industry participants have suspected for some time. At an industry conference in April, Dell Computer's chairman and chief executive, Michael Dell, commented that memory makers must be benefiting from the recent rise in prices. These companies supply DRAM to PC makers for use as main memory in desktop and notebook computers.
"There was some cartel-like behaviour by a number of DRAM suppliers," Dell said at the conference. "There was an assumption by some of the companies that they could have both an incredible increase in the price of DRAM and [increased] demand at the same time. The world just doesn't work that way."
DRAM pricing has a dramatic effect on PC vendors such as Dell, since main memory can make up 5% to 6% of a PC's total materials cost, Jim Cantore, principal analyst for memory with market researcher iSuppli, said.
"The major [PC vendors] really felt they were getting hit by a unified action; they thought DRAM suppliers were in collusion to set prices higher," Cantore said. "But from the [DRAM] industry standpoint, they went from losing a horrible amount of money last year to trying to make a little money in the first quarter."
Tthe dramatic fall in DRAM prices last year, followed by a hike this year, probably prompted the DoJ's investigation, Cantore said. Memory makers were trying to recover after selling DRAM significantly below cost, he said. One observer noted that the DRAM industry has been subject to wild price swings for decades.
"The synchronisation of pricing trends is explainable; DRAM vendors find out from their customers what they are willing to pay," said Peter Glaskowsky, editor in chief of Microprocessor Report. "But at the same time, it's entirely possible that some of these companies might have other channels to get [each other's] pricing information directly. It is a very competitive market, but cooperation, especially when they're trying to support higher prices, would benefit all of them."