HBM and DRAM/NAND storage capacity risks temporarily delayed! Samsung labor dispute enters mediation process.

The union organization of Samsung Electronics, the world's largest supplier of DRAM/NAND storage chips, announced on Friday that they will enter an important mediation process with the company on May 11th and 12th regarding a major wage dispute; the dispute has threatened to escalate into a potential large-scale strike within the company. The union organization stated in a statement that if they are not satisfied with the mediation result, they are prepared to proceed with their planned comprehensive strike. It is understood that the union organization of this South Korea-based global chip manufacturing giant, second only to TSMC, has been taking labor protest actions to demand higher bonuses, hoping to receive a huge year-end bonus similar to their largest storage chip competitor SK Hynix, and has threatened to strike for 18 days starting from May 21st. The union organization stated that they, along with the management of Samsung Electronics and government negotiation representatives, held a meeting on Friday, with labor ministry officials pledging to provide "full support" for negotiations between the two sides. Samsung Electronics and the labor ministry did not immediately respond to requests for comment. Thanks to the positive news of the wage dispute entering the mediation process, Samsung Electronics' stock price rose 2.6% in after-hours trading in Seoul. As of the close of regular trading on the Korean stock market on Thursday, Samsung Electronics' market value remained above 1 trillion dollars. Samsung Electronics reached a milestone on Wednesday, with a year-to-date increase of about 75%, bringing its market value to over 1 trillion dollars, becoming the second Asian company after TSMC to reach a market value of 1 trillion dollars. Earlier this week, the chairman of Samsung called on union members to negotiate with management to resolve the wage dispute, warning that the planned strike could have "serious consequences" for the South Korean economy and Samsung Electronics' profit statement. In the background of the unprecedented AI infrastructure boom driven by the so-called "storage chip supercycle", the two super storage chip giants based in South Korea - Samsung Electronics and SK Hynix - which collectively account for nearly 50% of the Kospi index, have become the most powerful engines attracting global capital, and have also helped the South Korean stock market hit new highs and outperform global stock markets. The benchmark Kospi index in the South Korean stock market has risen by about 78% this year, making it one of the best-performing markets globally. The union had threatened to strike for 18 days starting from May 21st, so if the mediation is successful, the biggest significance would be to reduce the risk of production interruptions in the super tight cycle of HBM, DRAM, and NAND; if the mediation fails and evolves into a comprehensive strike, it could amplify the risks of delivery, customer trust, and supply chain stability at a time when AI storage is in short supply. The rise of Samsung's stock price by 2.6% after-hours reflects the market's short-term relief that the "strike risk may be mitigated by mediation". Trillion-dollar investments in AI data center-grade chipsets are driving the storage chip industry into an "unprecedented supercycle", but it should be noted that Samsung still faces fierce competition in the HBM field from the dominant SK Hynix. The market is really concerned about HBM4 yield rates, the share of orders from NVIDIA/large CSPs, long-term supply share, and accelerating profit margin realization. Whether it is Google's massive TPU AI computing cluster or NVIDIA's massive AI GPU computing cluster, the need for fully integrated HBM storage systems carrying AI chips cannot be overlooked. Add to that the current push by tech giants to rapidly purchase server-level DDR5 storage and enterprise-grade high-performance SSDs/HDDs, and Samsung Electronics, SK Hynix, and Micron Technology are all caught in the most core storage areas: HBM, server-grade high-performance DRAM (including DDR5/LPDDR5X), and high-end data center-level SSDs, forming the most direct beneficiaries in the "AI memory + storage stack", reaping the "super dividends" of the AI infrastructure wave. The latest performance data released by Samsung Electronics shows that its semiconductor manufacturing business sector has exceeded expectations, with profits skyrocketing by a whopping 48 times. Global SSD storage product leader SanDisk's latest performance shows a revenue of $5.95 billion in the third quarter, a year-on-year increase of 97%, far exceeding analysts' expectations of $4.7 billion. Adjusted earnings per share were $23.41, almost 1.6 times analysts' expected $14.54, with data center business revenue more than tripling year-on-year, reaching $1.47 billion in a single quarter. Therefore, if this important labor-management risk is smoothly resolved, Samsung Electronics will be able to more fully enjoy the profit expansion and valuation reassessment brought about by the AI-driven storage chip super bull market; but after successfully breaking through the $1 trillion market value mark, the market will increasingly demand that Samsung prove: it is not only a beneficiary of the storage super cycle, but also the most core winner in the HBM field, rivalling the largest share holder SK Hynix. If Samsung can continue to accelerate the mass production of HBM4 and lock in customer orders, continue to secure long-term orders for huge DRAM/NAND, its HBM share is expected to surpass SK Hynix, and its market value is expected to move towards a higher peak.