"If Samsung Stops, Prices Will Skyrocket": Taiwan Senses Opportunity Amid Strike Threat [Taiwan Chip Dispatch]

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With the Samsung Electronics labor union announcing a general strike in May, movements are being detected in the global memory landscape. The Taiwanese semiconductor industry has analyzed that if Samsung Electronics faces disruptions in memory production, it could benefit from the situation, and major companies are closely monitoring the progress of the strike.

At the front gate of Samsung Electronics Hwaseong Campus in Hwaseong, Gyeonggi Province on July 8, 2024, during the three-day general strike declared by the National Samsung Electronics Union, the largest union of Samsung Electronics, union members are shouting slogans at the general strike rally. Photo by Jo Yongjun jun21@

According to the Economic Daily News of Taiwan on the 23rd, local memory semiconductor companies such as Nanya, Winbond, and PSMC have begun to assess the situation, believing that the general strike by the Samsung Electronics union could have a greater impact on the global memory supply chain. They view that if Samsung Electronics, the world's largest DRAM supplier, experiences production disruption, it could lead to memory shortages and a sharp spike in prices.

Previously, the Samsung Electronics Union Joint Struggle Headquarters secured the right to strike with a 93.1% approval rate in a strike vote that began on the 9th. The Joint Struggle Headquarters is a joint bargaining group formed by three unions, led by the Samsung Electronics Branch, which became the majority union after its membership exceeded 60,000, making it a super enterprise union. They are demanding the removal of the cap on performance bonuses, among other issues, and plan to continue their struggle from a rally on April 23 to a general strike in May. If the strike materializes, it will be the second strike in the history of Samsung Electronics since its founding.

Wu Yating, Senior Vice President at TrendForce, stated, "As the strike by the Samsung Electronics union intensifies, the likelihood of disruptions to memory production is increasing," and added, "This strike could negatively affect not only the production but also the prices of DRAM and high bandwidth memory (HBM), although the exact extent of the impact requires further analysis." In the fourth quarter of last year, Samsung Electronics held a global market share of 36.6% in DRAM and 40% in NAND, wielding key influence over the memory supply chain.

Taiwanese memory manufacturers view this situation as an opportunity to strengthen their product pricing power. While the so-called 'Memory Big 3' compete in cutting-edge ultra-fine processing, Taiwanese companies have been targeting niche markets by focusing on general-purpose DRAM and power memory. In fact, since last year, as memory prices have rapidly increased, the combined revenue of major Taiwanese memory companies has continuously set new record highs.

An official in the local semiconductor industry analyzed, "Currently, SK hynix and Micron are focusing their capabilities on producing HBM for artificial intelligence (AI), resulting in tight supply of general-purpose DRAM and NAND. If Samsung's supply is also cut off in this situation, it is hard to predict how high memory prices could rise." KB Securities previously estimated that DRAM and NAND prices would increase by 148% and 111%, respectively, compared to the previous year.

Seo Seungyeon, a researcher at DB Financial Investment, forecasted, "DRAM prices are expected to continue rising through next year due to robust demand from AI and general servers, tariffs, and legacy supply shortages. Considering the fierce AI investment competition among big tech companies and the shift of capacity to HBM, which is tightening the supply of general DRAM, the DRAM boom is likely to continue until the first half of 2027."

Economic Daily News, Taiwan = Yeh Tingchun, Yin Huichung / Translated by The Asia Business Daily

*This column is published as part of a strategic partnership between The Asia Business Daily and Taiwan's Economic Daily News.

This content was produced with the assistance of AI translation services.