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

As the world's largest supplier of DRAM and NAND, Samsung Electronics' labor crisis continues to escalate, bringing new risks of price increases to the memory chip market. The union plans to launch an 18-day strike starting on May 21, with analysts warning that this threat may trigger a rush to buy chips by OEM manufacturers and large tech companies, pushing up memory prices during the crucial window for contract price negotiations in the third quarter. On May 18, a South Korean court ruled in favor of Samsung Electronics' partial injunction application, requiring the union's strike action not to affect production; if the union does not comply with the court's order, they will face fines of approximately 100 million Korean won per day. On the same day, Samsung Electronics and the union initiated a new round of wage negotiations under government mediation, with the union's core demand being to receive a special bonus equivalent to 15% of the company's operating profit. South Korean President Lee In-myeong called on both labor and management to gather wisdom, give up unilateral interests, and seek cooperation. The above news triggered intense volatility in the South Korean capital market - the KOSPI and KOSPI200 indices fell by more than 4% in the morning session, but after the court's "warning order," the Korean stock market made a V-shaped reversal, with Samsung Electronics, SK Hynix and other chip stocks also rebounding. The event also affected global investors' sentiment towards chip and other tech stocks. Despite multiple interventions to dissuade them, the Samsung Electronics union has stated that they will continue with the planned strike. According to the Wind Trader's message, as reported by Bank of America Global Research on May 16, the actual impact of Samsung's strike on global memory supply may be relatively limited, but the preventive hoarding effect could serve as a more direct catalyst for pushing up prices - DRAM and NAND spot prices have already begun to recover slightly this week from previous softness. Limited impact on production lines, but risks in the backend packaging area cannot be ignored The Samsung South Korean union's planned strike from May 21 to June 7, lasting 18 days, will be triggered if the special bonus negotiations (equivalent to 15% of the company's operating profit) fail to reach an agreement. It is worth noting that the strike period overlaps significantly with the negotiation period of third-quarter memory contract prices (usually in June), making the market particularly sensitive to price trends. Bank of America Securities research believes that Samsung's memory wafer production lines are highly reliant on factory automation, with limited personnel for cleanroom operations, thus the possibility of a complete shutdown is relatively low, making the theoretical impact of an 18-day strike relatively manageable. However, the impact on the labor-intensive backend packaging area may be more direct. The report also points out that once a full-scale shutdown occurs, it typically takes at least several months for the wafer plant to resume normal operations, which is a structural risk that cannot be overlooked when evaluating potential supply disruptions. Hoarding effect: Spot prices are already responding Bank of America Securities believes that the impact of the strike on memory prices may mainly come from demand-side preventive hoarding. The report indicates that some OEM manufacturers and large tech companies may preemptively purchase Samsung's memory chips to meet their needs for the traditional peak season from September to October, thereby pushing up prices in the spot market. The high sensitivity of the timing is also reflected in the contract pricing level. Third-quarter memory contract prices are usually negotiated in June, coinciding with the strike period. Bank of America Securities expects that this will provide positive support for memory chip manufacturers in contract pricing. Preliminary price signals have already appeared in the market. According to DRAMeXchange data, this week's DRAM and NAND spot prices have stabilized and rebounded from the continuous softening in April and early May: 16Gb DDR5 spot price is reported at $40.7, up 2% for the week; 4Gb DDR4 up 5% for the week; 1Tb NAND wafer spot price up 1% for the week, with a cumulative increase of 386% year-on-year. Bank of America Securities points out that DDR5 prices have continued to rise this week, and DDR4 and NAND prices, which had been falling for several weeks, are stabilizing. This article is reprinted from "Wall Street News"; GMTEight Editor: Chen Xiaoyi.