Investing.com — JPMorgan analysts maintained their bullish stance on on Wednesday, urging investors to buy any pullback in shares despite an escalating labor dispute that some say threatens to disrupt global chip supply chains.
JPMorgan analysts acknowledged the gap between the two parties appears to have not narrowed down on critical topics, including removing the OPI ceiling and legislating an OP-sharing incentive scheme. The firm expects 6-10% of operating profit downside risk in 2026 from labor-related expense increases and 1-2% of the device solutions division revenue being impacted from production disruptions.
“Nevertheless, our OW thesis on SEC is unchanged as we maintain our thesis of a higher-for-longer memory upcycle and improving HBM execution,” the analysts wrote. “We continue to advocate buying the dip from shares pulling-back on any labor-strike issues.”
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The analysts said that uncertainties may weigh on share sentiment in the short term, but reiterated an Overweight rating and KRW350,000.00 price target on the South Korean chipmaker.
Samsung shares dropped as much as 5% early on Wednesday following the breakdown of talks, but regained ground and closed up 1.79%.
Samsung and its largest labor union, representing more than 50,000 workers, failed to reach consensus during a government-initiated mediation period on May 11-12. The union said it plans to proceed with an 18-day strike beginning May 21 unless management improves its offer on wages and performance bonuses. Workers are demanding the removal of a cap on bonus payouts and want a larger share of profits from Samsung’s artificial intelligence chip business.
The company said it regretted the collapse in talks but would continue dialogue with labor representatives.
The dispute also comes at a time when Samsung seeks to catch up with rival in the high-bandwidth memory chip market used in Nvidia’s AI processors. Samsung employees have pointed to substantially larger bonuses paid by SK Hynix after its strong AI-driven earnings growth.
UBS analysts said Wednesday that Samsung is on track to match SK Hynix’s share of the high-bandwidth memory market by 2027 as demand for artificial intelligence chips remains strong. UBS maintained its HBM shipment forecasts for Samsung at 9.7 billion gigabits for 2026, representing 124% growth, while raising its 2027 estimate to 23 billion gigabits, up 137% and higher than its prior forecast of 20.3 billion gigabits.
The two companies would each hold approximately 40% of the HBM bit market share in 2027, with Micron accounting for the remaining 20%, UBS said.