Peace at Samsung Won’t Soothe Micron’s Frenzy: HBM Sold Out into 2027 as Analysts Lift Targets to $1,100

Samsung's tentative labor deal avoids immediate chip supply disruption, but analysts predict Micron benefits from sustained AI-driven DRAM pricing boom through 2027.

A planned strike at Samsung Electronics that threatened to rattle the global memory-chip supply chain was averted late Wednesday night. The tentative labor deal, struck roughly 90 minutes before the walkout was set to begin, removes an immediate disruption risk for the world’s largest chipmaker by revenue. But for Micron Technology, the relief is temporary—the structural shortage in DRAM and high-bandwidth memory shows no sign of easing.

Samsung and its union reached a preliminary agreement that includes a new bonus system for the semiconductor division, with the company pledging to use 10.5% of business-unit profit for payouts—up from a previous cap but below the union’s demand of 15%. The deal sets ambitious operating-profit targets of 200 trillion won (roughly $133 billion) for 2026–2028, then 100 trillion won annually from 2029 through 2035. Union members will vote on the accord from May 22 to May 27, leaving a slim chance of further turbulence. South Korea’s labor minister cautioned that the path to a final sign-off remains “a long way off.”

The immediate market response was a sigh of relief: Samsung shares surged more than 6%. In Frankfurt, Micron stock opened at €645, up 2.51%, before climbing further to €652.80, a gain of 3.75% on the day. The year-to-date return stands at a staggering 142.68%, while the 12-month advance exceeds 670%. Even so, the shares are not immune to sharp pullbacks—they lost 5.02% in the past week alone.

Analysts argue that Micron’s true catalyst is not a single labor event but a multi-year pricing boom driven by insatiable AI demand. Citigroup forecasts DRAM prices will jump 40% in the current quarter and roughly 200% year-over-year in 2026. Gartner is only slightly less exuberant, seeing a 125% increase for DRAM next year and a 234% surge for NAND flash. A genuine easing of the supply crunch, the research firm reckons, will not arrive until late 2027.

Wall Street has responded with a flurry of upward revisions. Melius Research raised its target from $700 to $1,100 with a “Buy” rating, matching HSBC’s new $1,100 target. BofA Securities jumped from $500 to $950, Citigroup from $425 to $840, and Mizuho from $740 to $800. CFRA also upgraded its price objective from $500 to $900, citing stronger earnings power in fiscal 2026 and 2027. The consensus on the Street is a “Strong Buy,” backed by 27 buy recommendations and three holds.

Micron’s own commentary reinforces the bullish thesis. On a JPMorgan technology conference call, operating chief Manish Bhatia said the company is on track for another record free cash flow quarter and that its balance sheet has never been stronger, after upgrades from all three major credit-rating agencies. Demand continues to outrun what Micron and the industry can supply, with tightness in HBM, DRAM, and NAND expected to persist beyond 2026. Bhatia pointed to structural factors: new memory generations yield smaller efficiency gains, HBM consumes larger chip area per wafer, and new fabrication plants take longer to come online than in past cycles.

The HBM segment is particularly constrained. Micron’s entire HBM3E and HBM4 capacity is contracted through 2026, with six major AI and cloud customers locked into long-term agreements. Pricing for most of the HBM3E output is already fixed, giving Micron unusual revenue visibility in a notoriously cyclical business. The company is already ramping HBM4 production at twice the speed of its HBM3E ramp, and the first JEDEC-standard HBM4E chip is scheduled for introduction in 2027. In the broader HBM market, SK Hynix leads with 62% share, Micron holds 21%, and Samsung trails at 17%—a gap that partly reflects Samsung’s protracted qualification delays at Nvidia.

Nvidia’s blockbuster quarterly results have further validated the AI memory thesis. As the hyperscalers build out AI factories, each new architecture demands faster, denser memory, and Micron supplies the high-bandwidth modules that power the most advanced graphics processors. The company is also sampling 256-gigabyte DDR5 RDIMMs based on 1-gamma technology, which deliver speeds up to 9,200 MT/s while cutting power consumption.

The financial metrics already reflect the strength. In the most recent quarter, revenue hit $23.86 billion, up from $8.05 billion a year earlier. GAAP net income came in at $13.79 billion, or $12.07 per diluted share, and operating cash flow reached $11.90 billion. For the current quarter, management targets roughly $33.5 billion in revenue and adjusted earnings per share of $19.15, implying a gross margin of 81%.

The next concrete test is the Samsung union vote through May 27. If the deal holds, the immediate supply risk vanishes. But even if it does not, Micron’s biggest lever remains the fact that its HBM production is spoken for years ahead, and the broader memory market is facing a price explosion that shows no sign of peaking before 2028.