An analysis said the Samsung Electronics union's demand for 45 trillion won in performance bonuses and its announced general strike could weigh on the company's share price. Global investment bank (IB) Citigroup lowered Samsung Electronics' target price, saying a large performance-bonus provision due to the strike could hurt short-term earnings.

Citigroup analyst Peter Lee, in a report released on the 30th, maintained a "Buy" rating on Samsung Electronics but cut the target price by 6.3% to 300,000 won from 320,000 won.

A rally by the joint struggle headquarters of the labor union takes place in front of the Samsung Electronics Pyeongtaek Campus in Pyeongtaek, Gyeonggi Province, on the 23rd of last month./Courtesy of Yonhap News

Lee said escalating labor-management conflict could trigger a large performance-bonus provision, which would negatively affect earnings. The report said that if the provision is reflected, Samsung Electronics' operating profit for 2026–2027 could be revised down 10%–11% from earlier estimates.

Lee analyzed, "The memory cycle's strength itself will align with market consensus, with the memory shortage expected to worsen in 2027." Clients are already pre-ordering volumes for next year as demand continues to outstrip supply.

Samsung Electronics' high-bandwidth memory (HBM) sales were also expected to increase sharply.

However, he said, "We maintain a conservative view in terms of short-term earnings visibility." The union risk could act as a significant variable for short-term earnings. The report also identified as risk factors the timing of mass-production approval for next-generation products such as HBM4, price pressure from competitors' aggressive investments in memory and foundry, and downside pressure from a shift to a stronger won.

The Samsung Electronics union has announced a strike while demanding the removal of the performance-bonus cap and a performance bonus equal to 15% of operating profit. Fifteen percent of operating profit is estimated at 45 trillion won. The union warned it would launch an 18-day general strike from May 21 to June 7 if its demands are not met.

President Lee Jae-myung criticized this, saying, "Some organized workers are making excessive, unjust demands just to benefit themselves."

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