KB Securities on the 23rd analyzed that the strike by the Samsung Electronics DEVICE Solutions (DS) union will be a factor that amplifies upward pressure on prices.
At Samsung Electronics' DS institutional sector, wage talks over issues including scrapping the cap on performance bonuses have been suspended, and a large-scale rally is set to be held that day at the Pyeongtaek business sites. The union has announced an 18-day strike from May 21 to June 7.
If the strike materializes, disruptions to memory chip production will be inevitable. The union estimates the resulting losses at 20 trillion–30 trillion won.
Kim Dong-Won, a KB Securities researcher, said that if it materializes, the expected number of strike participants will reach 30,000–40,000, or 30%–40% of all union members, making production disruptions unavoidable.
This, the explanation goes, is different from the strike two years ago. Kim explained that participation at the time was only about 15% of all union members, and by using substitute work, the market impact remained limited.
If this strike materializes, memory supply shortages are expected to intensify and upward price pressure to expand. Given the current production share at the Pyeongtaek and Hwaseong business sites, the scale of supply disruption is estimated at 3%–4% for DRAM and 2%–3% for NAND.
In the worst case, if the strike continues for 18 days, it is highly likely that it will take an additional two to three weeks to restart and normalize the automated lines. Kim said, "In a tight memory supply-demand environment, this strike will act as a key variable that deepens supply shortages and further strengthens upward pressure on prices."