China Monitors Increase In Price Of Chips Closely

China Daily reported that China’s regulator has been monitoring the rise in mobile phone storage chip prices closely on Wednesday. The regulator would look into potential price fixing by chip manufacturers.

The Chinese newspaper cited the National Development and Reform Commission’s Pricing Supervision Department official, saying that the NDRC was well aware of the situation of an exponential rise in the chips prices over the past 18 months.

“We have noticed the price surge and will pay more attention to future problems that may be caused by ‘price fixing’ in the sector,” said Xu Xinyu, the NDRC official.

China Daily also pointed out that official referred that there might have been a coordinated action taken by firms to acquire maximum profitability by raising prices of products.

A “super-cycle” of tight supply and rising demand for memory chips, which provides power to servers and smartphones, have been responsible for fueling up prices and driving maximum profitability for chipmakers such as SK Hynix Inc. and Samsung Electronics Co. Ltd.

The China Daily reported that the NDRC had a word with Samsung. The newspaper stated Wang Yanhui, the secretary-general of the Mobile China Alliance, had knowledge of the discussion. An industry association, Mobile China Alliance has been formed for phone companies. Currently, more than 30 mobile companies are members of the alliance.

Wang stated it was too soon to determine further measures to be taken. However, the government would determine penalties given by other countries if Samsung was found guilty in engaging in price fixing.

Samsung did not comment immediately on the report released by China Daily.