Samsung 18-day strike countdown! Buyers panic buying may push up memory prices

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As the world's largest supplier of DRAM and NAND, Samsung Electronics’ labor crisis continues to intensify, posing new upward pricing risks to the memory chip market. The union plans an 18-day strike starting May 21. Analysts warn that this threat may trigger stockpiling behaviors among OEMs and major tech companies, pushing up memory prices during the critical window for Q3 contract price negotiations.

On May 18, a South Korean court ruled to approve part of Samsung Electronics’ injunction, requiring that union actions not affect production output; if the union disobeys the court order, it will face fines of approximately 100 million won per day. On the same day, Samsung Electronics and the union, under government mediation, began a new round of wage negotiations, with the union’s core demand being a special bonus equivalent to 15% of the company’s operating profit. President Lee Jae-myung of South Korea called on both labor and management to pool their wisdom, abandon unilateral interests, and seek cooperation.

These developments triggered volatility in Korea’s capital markets—the KOSPI and KOSPI200 indices fell more than 4% in early trading. After the court “warning order”, the Korean stock market made a V-shaped reversal, and chip stocks such as Samsung Electronics and SK Hynix also rebounded. The event affected global investor sentiment toward chips and tech stocks.

According to Wind Trading Desk, Bank of America Global Research’s report released May 16 stated that the actual impact of the Samsung strike on global memory supply may be relatively limited, but precautionary stockpiling may become a more direct catalyst for price increases—DRAM and NAND spot prices have already rebounded slightly from previous softness this week.

Limited Impact on Production Lines, Backend Packaging Area Risk Cannot Be Ignored

The Samsung Korea union’s strike is scheduled for May 21 to June 7, lasting 18 days, triggered if special bonus (equal to 15% of operating profit) negotiations fail. Notably, the strike window overlaps significantly with Q3 memory contract price negotiations (usually in June), making the market particularly sensitive to price trends.

Bank of America Securities Research believes that Samsung’s memory wafer fab production is highly dependent on factory automation, with few operators in cleanrooms, so a complete shutdown is unlikely and the theoretical impact of an 18-day strike is relatively controllable. However, labor-intensive backend packaging areas may be directly affected. The report also warns that if a full shutdown occurs, it typically takes months for wafer fabs to return to normal operations, an important structural risk in assessing potential supply disruptions.

Stockpiling Effect: Spot Prices Have Already Responded

Bank of America Securities believes that the main impact of this strike on memory pricing may come from precautionary stocking behavior on the demand side. The report points out that some OEMs and large tech companies may preemptively buy Samsung memory chips to meet the needs of the traditional peak season in September–October, thereby driving up spot market prices.

The timing sensitivity also appears in contract pricing. Q3 memory contract prices are usually negotiated in June, highly overlapping with the strike period. Bank of America Securities expects this to provide positive support for memory chip contract pricing.

Preliminary price signals have appeared in the market. According to DRAMeXchange data, this week, DRAM and NAND spot prices have stabilized and rebounded after prolonged softness in April and early May: 16Gb DDR5 spot price was $40.7, up 2% this week; 4Gb DDR4 up 5% in the week; 1Tb NAND wafer spot price up 1%, with a cumulative year-on-year increase of up to 386%. Bank of America Securities notes that DDR5 prices rose further this week, and previously declining DDR4 and NAND prices have also stabilized.

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