e: MU Stock Surges Over 5% Premarket: What’s Driving It Higher?

• After two days of talks, Samsung and its workers failed to reach a consensus on pay. 
• Samsung workers have threatened a major strike starting next week if their requests are not met.
• Investors believe the potential disruption at Samsung could be a positive for rivals like Micron and SK Hynix. 

Micron shares gained more than 5% in early premarket trading as talks between its rival, Samsung Electronics, and its union failed, raising the probability of a major strike by workers at the South Korean chip giant next week.

After marathon talks over two days, mediated by the government, Samsung and its workers could not reach a deal on pay, Reuters reported. 

The union said over 50,000 workers could go on an 18-day strike starting May 21, an outcome that would significantly affect Samsung's business and might even impact global trade.

In essence, the dispute centers around the union’s demand that Samsung uncap performance payouts and set them at 15% of operating profit.

Samsung’s Share Under Pressure, Rivals Gain

SK Hynix, Samsung’s main competitor in Korea, rallied 7.7% in Seoul on Wednesday. Samsung’s shares initially dipped as much as 5% before bouncing back at 1.8% up after the government intervened again to allay investor concerns.

South Korean Finance Minister Koo Yun Cheol on Wednesday urged the two sides to continue to negotiate. “A strike must be avoided at all costs,” he said, promising government support, Bloomberg reported.

Samsung, which recently achieved a $1 trillion market capitalization, and SK Hynix have been among the biggest beneficiaries of the AI-driven chip boom, to the extent that the South Korean government has acknowledged a sharp rise in tax revenue from the higher taxes paid by the two companies.

Over in the U.S., the widely-watched Roundhill Memory ETF (DRAM) jumped over 6% in Wednesday’s premarket session.

Retail’s View

Micron remains the center of intense market attention as traders aggressively buy the dip from Tuesday, fueled by the conviction that surging AI-driven memory demand and potential supply constraints from a Samsung labor strike will drive long-term upside. 

“Samsung strike in full effect. Bullish a* for $MU,” a trader wrote on the company’s stream on Stocktwits.

Investors also appeared to be placing calls based on the expectation of a big move when Nvidia, the chip sector bellwether, reports its quarterly earnings on May 20. “$MU 1000 on Nvda earning day!” one said.

 On Stocktwits, the retail sentiment for MU and DRAM climbed higher in the ‘extremely bullish’ zone. Micron shares are up 167% year to date, while DRAM has surged about 70% since the fund’s launch on April 2.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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