Samsung’s (GB:SMSN) AI and wearables push could be derailed by an indefinite labor strike. The company’s 30,000-strong labor union’s action threatens to disrupt production.
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Samsung’s Labor Woes
The indefinite strike marks another escalation in the dispute between Samsung and its largest labor union. Earlier this week, the South Korean electronics giant’s workers staged a walkout seeking better pay. The action was originally intended to last three days.
Samsung is the largest memory chipmaker in the world. Notably, today’s indefinite strike coincides with its Galaxy Unpacked event, where the tech giant is expected to announce new health-tracking features for its smartwatches. According to Bloomberg, the labor union plans to first target Samsung’s 8-inch production facility, which requires more human workers. Subsequently, it will target the company’s high-bandwidth memory production facility.
While a significant chunk of Samsung’s production is automated, the company still faces potential challenges in the coming weeks. The striking labor union hopes its actions will bring management to the negotiating table.
Watch Out for Samsung’s Q2
Meanwhile, analysts expect bumper second-quarter results from Samsung on July 31. The company’s EPS for the quarter is estimated to gallop to $22.48 from $4.46 a year ago.
Is Samsung a Good Stock to Buy?
The current AI-fueled rally has pushed Samsung’s London-listed shares nearly 15% higher over the past six months. The TipRanks Technical Analysis tool is currently flashing a Buy signal for the stock on a monthly timeframe. This indicates a potential continuation of bullish action in Samsung’s share price.
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