JPMorgan analysts reaffirmed a positive stance on Samsung Electronics Co Ltd on Wednesday, telling investors to consider buying shares if they fall amid a worsening labor dispute that some observers warn could interfere with global chip supply chains.
The analysts acknowledged talks between Samsung management and the largest union have left key differences unresolved. They highlighted that the two sides appear to remain apart on central negotiation points, including the removal of an OPI ceiling and the enactment of an OP-sharing incentive scheme.
As a result of those outstanding issues, JPMorgan placed explicit figures on the potential financial impact of the labor tensions. The firm estimated a 6-10% downside risk to operating profit in 2026 stemming from higher labor-related expenses, and projected that production disruptions could shave 1-2% off revenue in the device solutions division.
"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."
JPMorgan also warned that uncertainty around the dispute could weigh on investor sentiment in the near term. Despite those concerns, the firm reiterated an Overweight rating and kept its KRW350,000.00 price target on the South Korean chipmaker.
Market moves on Wednesday illustrated the tug-of-war between concern and confidence. Shares in Samsung plunged as much as 5% in early trade after talks broke down, but later recovered to finish the day up 1.79%.
The current standoff follows a government-led mediation session held on May 11-12 in which Samsung and its largest union, which represents more than 50,000 employees, failed to reach agreement. The union has announced plans for an 18-day strike beginning May 21 unless management improves its proposals on wages and performance bonuses. Union demands include removing a cap on bonus payouts and securing a larger share of profits generated from Samsung's artificial intelligence chip business.
Samsung released a brief response expressing regret over the collapse of talks and saying it would continue dialogue with labor representatives.
The labor dispute arrives as Samsung seeks to close the gap with rival SK Hynix Inc in the high-bandwidth memory (HBM) market, a segment critical to AI processors. Employees at Samsung have pointed to substantially larger bonuses paid by SK Hynix following the latter's strong AI-driven earnings performance.
UBS analysts on Wednesday said Samsung appears on track to match SK Hynix's share of the HBM bit market by 2027, driven by continued robust demand for AI chips. UBS left its HBM shipment forecast for Samsung at 9.7 billion gigabits for 2026, which represents 124% growth, and raised its 2027 estimate to 23 billion gigabits - a 137% increase and above its prior 2027 projection of 20.3 billion gigabits.
According to UBS's estimates, Samsung and SK Hynix would each hold roughly 40% of the HBM bit market in 2027, with Micron accounting for the remaining 20%.
Taken together, the notes from JPMorgan and UBS sketch a picture in which bullish operational and market trends for memory products coexist with material near-term labor risks. Investors and market participants will be watching whether talks resume productively, and whether any strike action affects device solutions production and broader supply-chain dynamics.