The prices of mobiles and laptops are increasing day by day. Companies like Apple, OnePlus and others have recently increased the prices of many of their models. The reason behind this is usually the supply chain or price hike. But in a case filed on June 25 in a federal court in California, the real reason for the price hike has come to the fore.
This case has been filed by the world’s top three memory (RAM) supplier companies Samsung, SK Hynix and Micron. It is alleged that these three companies have acted as a syndicate and deliberately stopped the supply of RAM in the global market. As a result, the price of memory chips has increased by 700% in the last four years (from 2022 to now). Let’s find out why RAM has become so expensive, what is the role of AI in this? How does this affect the tech industry and the common Indian consumer?
What is the game of this syndicate?
Whenever the demand for something increases in the market or the price skyrockets, some company tries to attract more customers by making its own production. But as per the case, the exact opposite happened here. These three companies control 90% of the global DRAM (Dynamic RAM) market. As the price started increasing rapidly, none of them increased production. Rather, all three simultaneously reduced their production. This collaboration directly affected the common consumer, who was forced to buy expensive gadgets.
Leaving the common consumer, weakness towards AI
These companies have made a big change in their strategy. They have reduced the production of traditional RAM (DDR3 and DDR4) and are now focusing entirely on high-bandwidth memory (HBM). HBM is mainly used in AI data centers. AI companies are willing to pay a high price to meet their needs. AI companies like Google, OpenAI and Anthropic are buying high-bandwidth memory (HBM) in large quantities for their data centers. The biggest example of this change is the American company Micron. It has completely discontinued its own RAM brand Crucial, which is popular among ordinary consumers. The company has signed 16 new agreements with AI clients. It will now only deliver AI orders scheduled until 2030.
Which company’s RAM does Apple use in India?
If you think Apple depends on any company for its iPhone or MacBook made in India, then it is not. Apple uses RAM from these three companies (Samsung, SK Hynix and Micron) in India and globally. Apple may now look to Chinese chip companies to reduce its dependence on Samsung and Micron, which require US government approval due to the US-China trade war.
Impact on India
Although the case is being played out in the US, its impact is clearly visible in India. It will have an impact during the festive season. India is one of the world’s largest smartphone and PC markets. Consumers may have to pay more for budget smartphones and laptops during Diwali and Dussehra. Companies like Reliance, Adani and Yota are rapidly building AI data centers in India. The skyrocketing price of memory chips will also increase the cost of these infrastructure projects.
