Investing.com -- Samsung Electronics has entered emergency management mode as up to 50,000 employees prepare to strike for 18 days starting May 21, according to Mizuho TMT Sector Specialist Jordan Klein. The company has begun a "warm down" of its memory fabs at the Pyeongtaek facility to prevent equipment damage during a potential stoppage.

Samsung management and its union remain far apart on negotiations, with the union demanding a 15% share of operating profits and removal of bonus caps. The company’s stock dropped 8.6% on Friday.

The facility has removed approximately 15,000 wafer storage pods from automated systems at DRAM lines to protect work-in-progress inventory. Samsung is prioritizing its High Bandwidth Memory (HBM) lines for AI contracts with companies including Nvidia by reducing standard DRAM production.

Klein warned that production disruption extends beyond the strike period. Memory production lines require weeks to recalibrate after going offline.

Samsung executives, including CEO Jun Young-hyun, visited union leaders in Pyeongtaek on Friday in an attempt to avert the May 21 deadline. The company described the union as a "community of shared destiny" but the two sides remain deadlocked.

Klein noted that any disruption could lead to higher spot pricing trends. Micron Technology (NASDAQ: MU) and SK Hynix are positioned to benefit from potential supply constraints. Samsung controls nearly half of the global DRAM supply, and a three-week stoppage could create a supply vacuum that drives DRAM and NAND prices higher.