The Samsung strike turmoil has temporarily subsided, and Goldman Sachs is urging: "Buy Korea"!

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Samsung Electronics labor negotiations restart, injecting a boost of confidence into the Korean stock market. Goldman Sachs immediately issued a "buy" signal to clients, considering this correction to be an excellent opportunity to invest.

According to a Bloomberg report on Monday, Samsung union leaders said they would "participate sincerely" in negotiations with management, with both sides expressing willingness to resolve the dispute. Meanwhile, according to CCTV News, the Suwon District Court in South Korea approved part of Samsung Electronics' injunction request, requiring that the strike action must not affect production output.

Boosted by these developments, Samsung’s shares listed in Korea closed up 3.5% on Monday, helping the Korea Composite Stock Price Index (KOSPI) rebound after previous declines triggered by strike concerns.

Goldman Sachs analyst Christy Park stated bluntly in a report to clients: "By now, it should be clear to everyone: every correction in SK Hynix and Samsung is a buying opportunity." She pointed out that since April, SK Hynix’s share price has fallen more than 1% on only 5 out of over 30 trading days, with each drop fully recovered within 1 to 3 subsequent trading days.

Negotiations Restart, Strike Threat Not Yet Lifted

Although both sides have softened their stance, the union still maintains its threat—if contractual demands are not met, an 18-day strike will begin this Thursday.

To promote negotiations, Samsung made the first move last Saturday by replacing its chief negotiator. The Prime Minister of South Korea and the Samsung chairman also publicly called for both sides to seek compromise.

Tom Kang, Director at market research firm Counterpoint Research, said, "Both sides have a clear need to reach an agreement." He also noted that, due to Samsung’s lack of a strong union culture historically, both labor and management have relatively little experience in negotiations. "The differences seem significant, but the problem is not insurmountable. I believe both sides can resolve their differences without a strike."

If the Strike Happens, Impact May Be Limited but Not Negligible

Research firm TrendForce analyzed that the formal start date for the Samsung strike is set for May 21. Since Samsung’s semiconductor wafer plants are highly automated, the direct impact on production lines is expected to be limited.

However, there will likely be notable disruptions in packaging and logistics, R&D and design, as well as customer relations.

From the perspective of union coverage, about half of Samsung Group’s employees are union members, mainly concentrated in the semiconductor division. TrendForce also pointed out that management has extended an olive branch to the DRAM department, but has yet to reach an agreement with union members in the foundry and LSI divisions.

Goldman Lists Multiple Catalysts, Firmly Supports Samsung and SK Hynix

Christy Park systematically outlined several drivers in her report favoring Samsung and SK Hynix:

Labor Risk Receding: Samsung has replaced its entire negotiation team; once the strike suspense is resolved, a significant overhang on the share price will be lifted.

Traditional Memory Prices Remain Strong: Samsung is more exposed than SK Hynix in traditional memory and stands to benefit more.

HBM Price Upside: Currently, HBM (High Bandwidth Memory) prices are lower than traditional DRAM, leaving room for catch-up; both Samsung and Hynix will benefit.

Shareholder Returns Improve: With substantial free cash flow growth, Samsung's 2024–2026 shareholder return policy pledges to return 50% of free cash flow to shareholders, providing upside potential.

Kioxia ADR Listing Favors Hynix Sentiment: Hynix holds a considerable stake in Kioxia through a consortium. The potential American Depositary Receipt (ADR) listing of Kioxia may boost market sentiment towards Hynix; SK Hynix’s own ADR listing is also expected to advance in July.

AI Computing Power Demand Surge: Goldman predicts that the advent of Agentic AI will drive global token consumption up 24 times by 2030, reaching 12 trillion tokens per month. Both Samsung and Hynix will directly benefit from this wave of demand.

Risk Warning and DisclaimerThe market carries risks and investing must be done cautiously. This article does not constitute personal investment advice, nor does it take into account the individual user’s unique investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investing based on this is at your own risk. ```