Samsung Electronics (005930.KS) faces a labor union strike as the biggest variable as it prepares for mass supply of HBM4, the sixth-generation high-bandwidth memory (HBM) that ranks among its high-margin products. Observers say the strike could trigger a plunge in factory utilization rates and shake the company's top position in HBM technology, which it reclaimed after three years.
Samsung Electronics said at its first-quarter earnings conference call Thursday that "we expect HBM4 revenue to exceed half of total HBM revenue starting in the third quarter." The HBM4 production volume scheduled for this year has already sold out, and supply speed is now cited as the key factor that will determine the market landscape.
However, if a strike causes production disruptions, it could also adversely affect the supply schedule, giving competitors time to catch up. The production disruption from a strike was already confirmed at a general rally attended by some 40,000 union members on the 23rd. The union said that just one day after the rally, memory production fell 18.4% and foundry production plunged 58.1%. The union has announced an 18-day general strike from May 21 to June 7.
The problem is that the announced general strike period coincides with the "golden time," when HBM4 yield stabilization and shipment expansion are intertwined. If utilization rates plunge, it could go beyond production disruption to adversely affect trust with global Big Tech customers. In the artificial intelligence (AI) chip market, stable delivery is considered as much a competitive edge as technological capability.
The industry has even raised concerns that if a strike materializes, customers could turn to competitors in a "de-Samsung" shift. Starting with HBM4, the structure involves bundled orders of memory and foundry centered on a "base die" based on logic (non-memory) processes, leading analysts to suggest that the strike's impact could spread across the entire chip (DS) division.
