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China probing chipmakers Samsung, Micro Technology, SK Hynix, report says

All three are dominant suppliers of DRAM chips, which have gone up significantly in price.

Ram memory detail

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Chinese regulators have launched a probe into memory chip makers Micron Technology, Samsung Electronics and SK Hynix, The Wall Street Journal reported Monday. 

The China offices of all three companies were reportedly visited recently by China's State Administration for Market Regulation. Boise, Idaho-based Micron Technology confirmed to CNET that its China sales office was visited on May 31, and that it's cooperating with Chinese officials. The company didn't disclose what information the authorities were seeking. 

The three companies are dominant suppliers of DRAM, or dynamic random-access memory, chips used in smartphones and computers to store data. Office visits by Chinese investigators come as prices of the chips have soared, according to Reuters

"China [is] trying to protect their PC and smartphone market from rising DRAM costs," Stifel Nicolaus analyst Kevin Cassidy told Reuters. "Typically, China PC and smartphones sell at lower costs/margins than those in other countries." 

Chinese government officials have asked Samsung and SK Hynix, both headquartered in South Korea, to lower memory chip prices for top Chinese consumer electronics companies, according to The Korea Times

SK Hynix told CNET it's cooperating with the investigation. The other firms are also cooperating, the Journal reported, though none disclosed what the probe is about. Samsung Electronics and China's State Administration for Market Regulation didn't immediately respond to requests for comment.

China is working to lower its dependence on imported chips, the Journal reports, as almost 90 percent of the $190 billion worth of chips used there are imported or made in China by foreign-owned companies. China is reportedly working to domestically develop and produce memory chips.

In April, the US Commerce Department banned US companies from selling components to ZTE for seven years after determining that the Chinese telecom giant violated terms of a 2017 settlement by illegally shipping US equipment to Iran. The ban forced ZTE to shut down its "major operating activities." 

First published June 4, 1:43 p.m. PT
Updates, 4:10 p.m.: Adds comment from Micron; June 5 at 9:59 a.m.: Includes comment from SK Hynix. 

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