TLDR
- Micron shares rose 1.7% in premarket trading, extending a 75% monthly gain
- SK Hynix jumped 12% and Samsung gained 6.3% in local trading Monday
- Samsung unions threaten an 18-day strike from May 21 to June 7 over bonus demands
- A walkout could affect roughly 3% of global memory chip production
- JP Morgan estimates the dispute could cut Samsung’s annual operating profit by over 40 trillion won
Micron Technology stock rose in premarket trading on Monday as investors watched a labor dispute at Samsung Electronics that could disrupt global memory chip supplies.
Micron shares were up 1.7% before the opening bell. That adds to a run that has already seen the stock climb 75% in the past month, pushing its market value above $800 billion.
SK Hynix also gained, rising 12% in local South Korean trading. Samsung itself rose 6.3%.
All three companies have been riding strong demand for memory chips used in artificial intelligence hardware. That demand has pushed up prices across the sector.
The immediate concern for markets is a planned strike at Samsung. The company’s unions are threatening an 18-day walkout from May 21 to June 7 if talks with management break down.
Samsung and union representatives resumed talks Monday under the National Labor Relations Commission. No deal had been reached as of Monday afternoon.
These are considered post-mediation talks, the last formal step before a strike becomes likely. Any agreement reached at this stage carries the same legal weight as a full collective bargaining deal.
At the heart of the dispute is Samsung’s bonus system. The union wants Samsung to scrap its bonus cap and direct 15% of operating profit into a performance bonus pool. Based on profit forecasts, some chip workers could receive close to 600 million won each.
Management has offered a special compensation package but has refused to permanently remove the bonus cap, saying the structure would be hard to sustain long-term.
What a Strike Could Mean for Chip Supply
If the walkout goes ahead, the union coalition of around 73,000 members could see 30,000 to 40,000 workers participate. That is a much larger number than the 2024 strike, when only about 15% of roughly 32,000 members joined.
Jefferies estimates a strike could hit about 3% of global memory chip production. JP Morgan puts the potential profit hit to Samsung at more than 40 trillion won for the year.
Any drop in Samsung output would likely benefit Micron and SK Hynix, which sell competing products to many of the same customers.
Memory Chip Demand Already Running Hot
JP Morgan analyst Mixo Das wrote in a recent note that the supply-demand gap for memory chips is expected to widen further into 2027. Customers are already pulling orders forward due to concerns about future shortages.
Das said 2027 and 2028 could see continued price and volume growth for the sector.
South Korea’s Labor Minister Kim Young-hoon said Monday that both sides had agreed to return to talks, calling it a positive step while acknowledging the negotiations would not be easy.
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