CHINA has launched a probe into Samsung Electronics Co., SK Hynix Inc. and Micron Technology Inc., the three semiconductor makers who control the market for DRAM memory chips.

China is investigating price-fixing allegations as DRAM prices have risen sharply, the first such probe by China, said a source with knowledge of the matter.

Analysts said the matter was separate from past spats as well as the current Sino-U.S. trade tensions. Rather the high cost of chips has hurt many electronics makers, with Chinese manufacturers among the hardest hit as they operate at lower margins than rivals.

A senior South Korean government official said Samsung and SK Hynix contend that there has been no price-fixing.

“It is a situation where strong demand is boosting prices and factories can’t keep up with that level of demand even at full capacity,” said Moon Sung-wook, the senior industry ministry official.

South Korea’s industry minister, who is visiting China as part of efforts to boost his country’s investment in China, asked his Chinese counterpart for fair treatment for South Korean companies involved in the probe, the ministry said in a statement.

Chinese Commerce Minister Zhong Shan “promised to handle the matter fairly,” the South Korean industry ministry added.

All three firms said officials from China’s State Administration for Market Regulation had visited their offices recently. A Samsung spokesman said the company was cooperating with the Chinese authorities, but did not provide more details. A SK Hynix spokesman also declined further comment.

The crackdown on chipmakers was to ensure fair competition, said the Global Times.

Prices for DRAM chips, which help devices perform multiple tasks, have more than doubled in two years as servers, gaming PCs and cryptocurrency mining devices demand more firepower to process large amounts of streaming data.

Although China is investing heavily to build up its chip industry, it is currently the largest importer of memory products, consuming 20 percent of the world’s DRAM, according to research firm Trendforce.

“The investigation not only reflects the current oligopoly in DRAM market, but also shows the cost pressures faced by Chinese OEMs due to high DRAM prices,” said Avril Wu, senior research director of DRAMeXchange, a Trendforce division.

A potential probe was first flagged late last year when Chinese media reported that regulators approached South Korea’s Samsung over rising prices.

The DRAM sector has been a frequent target of regulatory probes globally over price-fixing allegations as the industry has seen a flurry of deals that left the two South Korean firms and their U.S. rival commanding 96 percent of the market.

Samsung had 44.9 percent market share in the first quarter, while SK Hynix has 27.9 percent and Micron has 22.6 percent, according to Trendforce.

In April, they were slapped with a class action lawsuit brought on behalf of U.S consumers over allegations that they conspired to inflate DRAM prices.(SD-Agencies)