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Chinese regulators mull anti-trust probe into Samsung for price-fixing its chip business
Prices of mobile phone memory chips have been skyrocketing for the last 6 quarters and Chinese regulators are considering action. After complaints from local smartphone manufacturers, China’s National Development and Reform Commission (NDRC) has decided to have a word with Samsung, the largest storage chip manufacturer in the world.
However, whether an antitrust review will be initiated remains to be seen, according to a report from 21Jingji (in Chinese). NDRC’s last high-profile case included Qualcomm. The anti-trust probe against the chipmaker giant was concluded with a settlement in 2015.
Storage has become the single most expensive item in phone manufacturing, higher than screens or CPU, the report states. The prices of storage chips have exploded by 300% within one year. The price began rising in Q3 2016 because of supply shortage which set off a chain reaction with mobile phones, hard disks and other products increasing in price. All of this has caused concerns among manufacturers.
Samsung was the largest benefactor of this increase. The company earned $54.5 billion in Q3 2017, a year-on-year increase of 179.47%. After the Galaxy devices battery explosion scandal, the semiconductor business became the main source of Samsung’s profit. Samsung Semiconductor Inc. exceeded the world’s largest chipmaker Intel for the first time in Q3 of 2017.
This wouldn’t be the first big anti-trust case for the Korean company. In 2005, Samsung was orderd by the US court to pay a $300 million fine for participating in an international conspiracy to fix prices in the storage chip market.