Samsung Electronics Faces Potential 18-Day Strike as Workers Demand Share of AI Chip Profits

The semiconductor industry is booming, and Samsung Electronics (Sanxing Dianzi 三星电子) workers want their cut of the AI chip windfall.

Here’s what’s happening: Two labor unions at Samsung are threatening an 18-day strike starting May 21, demanding the company share the wealth generated by the AI-driven semiconductor boom.

This isn’t just another labor dispute.

This is about a ¥219.48 billion RMB ($30.42 billion USD) profit surge, a company worth over $1 trillion, and a fundamental question about how profits should be distributed in one of the world’s most critical industries.

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Why Workers Are Striking Now: The AI Chip Boom Context

Let’s set the scene.

Samsung Electronics just crossed a historic milestone—market capitalization surpassing $1 trillion USD.

The reason?

Record semiconductor profits driven by insatiable demand for AI infrastructure.

In Q1 2024 alone, Samsung’s net profit reached 47.2 trillion KRW (approximately ¥219.48 billion RMB / $30.42 billion USD), which was nearly six times higher than the same period last year.

Almost all of that money came from one place: the semiconductor division.

The specific chips driving this boom are High Bandwidth Memory (HBM) chips—the specialized memory that AI companies like Nvidia (Yingweida 英伟达) desperately need to power their data centers.

AI companies are literally racing to secure chip supplies.

They’re signing long-term contracts at premium prices, which has already started pushing up costs for everyone else in the supply chain.

Meanwhile, the workers manufacturing these chips?

They’re watching record profits get funnelled upward while their compensation stays relatively flat.

That’s where the tension started.

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What Samsung Workers Are Actually Demanding

The unions aren’t asking for the moon.

Here’s their specific ask:

• 15% of operating profit from each business division distributed directly to employees
• A 7% wage increase across the board

If Samsung doesn’t agree by May 21, the unions will launch an 18-day strike.

To put this in perspective, last month 40,000 workers already held a demonstration outside the Samsung plant in Pyeongtaek, located 70 kilometers south of Seoul.

This isn’t just talk—workers are mobilizing.

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The Economic Fallout: Why This Strike Matters Beyond Samsung

• Direct Losses: 10-17 Trillion KRW ($6.4-11 Billion USD)
• Indirect Losses: Loss of HBM4 supply leadership to Nvidia
• GDP Impact: Threats to South Korea’s quarterly growth targets
• Supply Chain: Instability for 1,700 secondary supplier companies

An 18-day strike at Samsung wouldn’t just affect Samsung employees and shareholders.

The ripple effects would be felt across the entire global supply chain.

Direct Losses to Samsung

Kwon Seok-joon (权锡俊), a professor at Sungkyunkwan University in Seoul, estimates direct losses to Samsung from an 18-day strike could range from:

• Low end: 10 trillion KRW (approximately ¥46.5 billion RMB / $6.44 billion USD)
• High end: 17 trillion KRW (approximately ¥79.05 billion RMB / $10.95 billion USD)

That’s billions in lost production.

But here’s the thing—Professor Kwon notes that “the greater loss would be indirect.”

Indirect Losses: The Hidden Cost

Samsung is aggressively trying to expand its foundry business and establish itself as a trusted supplier of HBM4 chips for Nvidia (Yingweida 英伟达).

A strike would:

• Disrupt critical chip deliveries at a time when supply is already tight
• Undermine Samsung’s reliability as a strategic supplier
• Give competitors an opening to poach customers
• Damage relationships with major AI companies counting on Samsung for supply

In the semiconductor game, trust and reliability are currency.

Missing shipments during an AI chip shortage?

That’s the kind of thing that causes customers to diversify suppliers and never fully come back.

Broader Economic Impact on South Korea

This isn’t just bad for Samsung—it’s potentially bad for South Korea’s entire economy.

The Bank of Korea estimates that approximately 50% of South Korea’s 1.7% quarter-on-quarter GDP growth in Q1 2024 was directly attributable to chip manufacturing.

Samsung Electronics (Sanxing Dianzi 三星电子) and SK Hynix (SK Hainaisi SK海力士) account for more than 40% of the total market capitalization of the Korea Composite Stock Price Index (KOSPI).

Translation: If Samsung’s productivity takes a hit, so does the entire South Korean economy.

Supply Chain Cascade

A Samsung strike would trigger a cascade effect through 1,700 smaller companies that supply Samsung with components and services.

These suppliers depend on consistent orders to keep their operations running and their employees employed.

When Samsung’s production stops, the entire ecosystem suffers.

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The Negotiation Stalemate: Why Bonuses Keep Talks Stuck

Here’s where it gets interesting.

Management and the unions are actually close on the numbers.

The gap isn’t as big as you might think.

According to sources familiar with negotiations, Samsung Electronics has proposed approximately 13% of operating profits for bonuses.

The unions want 15%.

That’s a 2-percentage-point difference.

So why is a strike still happening?

Because the real fight isn’t about the percentage—it’s about permanence.

One-Time vs. Guaranteed: The Core Disagreement

Samsung offered bonuses, but management wants them treated as one-time payments based on annual performance.

The unions want these bonuses codified into company regulations and guaranteed to be paid annually.

In other words:

• Samsung’s position: “We’ll give you bonuses when profits are good, but it’s not guaranteed”
• Union’s position: “We want it locked into our contracts as a permanent feature of compensation”

Woo Ha-kyoung (禹夏庆), acting chairman of the Samsung Electronics labor union, stated that negotiations broke down because management only offered a one-time proposal rather than incorporating the bonuses into contracts.

From a worker’s perspective, this makes sense.

If Samsung can remove bonuses whenever profits dip, employees have no real security.

Samsung maintains it will “continue to strive to reach an agreement with the union,” but the company seems hesitant to lock in permanent obligations.

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The SK Hynix Precedent: What Samsung Workers Are Really Comparing ThemSelves To

Samsung workers aren’t pulling these demands out of thin air.

They’re looking at their main competitor and seeing a better deal.

SK Hynix’s Profit-Sharing Agreement

SK Hynix (SK Hainaisi SK海力士) already agreed to distribute 10% of its operating profits to employees over the next decade.

What does that actually mean in dollar terms?

Brokerage Meritz Securities (Meirui Zhengquan 美瑞证券) predicts SK Hynix will achieve an operating profit of 25 trillion KRW (approximately ¥116.25 billion RMB / $16.11 billion USD) this year.

If 10% of that is distributed among SK Hynix’s 35,000 employees, the average bonus per person would be approximately 700 million KRW (approximately ¥3.255 million RMB / $451,000 USD).

That’s not a rounding error—that’s a life-changing amount of money for most people.

Samsung workers see their competitor offering this and think, “Why not us?”

It’s a completely reasonable question.

Why SK Hynix Can Do This But Samsung Hesitates

Here’s the crucial difference:

SK Hynix focuses almost exclusively on chip manufacturing.

Samsung Electronics is vastly more diversified.

It also produces:

• Home appliances
• Televisions
• Smartphones

And here’s the problem for Samsung’s management—these other divisions are increasingly struggling due to high chip prices.

When your smartphone division is getting squeezed because it has to pay premium prices for memory chips, it becomes politically difficult to funnel massive bonuses to the semiconductor workers who are selling those chips internally at inflated rates.

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The “One Samsung” Philosophy Under Pressure

Samsung Electronics maintains what it calls a “One Samsung” philosophy—the idea that all business divisions should cooperate rather than compete.

This unified approach sounds nice in theory.

But it’s about to get tested in a major way.

The Fairness Problem

If the semiconductor division receives 15% of operating profit distributed as bonuses while other divisions receive nothing, the compensation structure becomes dramatically unequal.

A smaller union representing workers in the smartphone, TV, and appliance manufacturing sectors actually withdrew from the joint strike action on Monday.

That’s telling.

Workers in non-semiconductor divisions probably don’t want to strike in support of higher bonuses that won’t apply to them.

What Happens Next: The Long-Term Structural Problem

Professor Kwon Seok-joon suggested that if the semiconductor division “takes 15% of the operating profit, the books will quickly look very uneven.”

And he’s not predicting Samsung will just live with that imbalance.

Instead, Professor Kwon expects that in the long run, Samsung will pursue one of two paths:

• A “spin-off in some form”—splitting the semiconductor business into a separate publicly-traded company
• Or turning the semiconductor division into a “quasi-autonomous ‘company within a company'” with its own independent compensation and incentive system

This strike might be the catalyst that forces Samsung to fundamentally restructure how it operates.

The current “One Samsung” model may not survive a scenario where one division is massively more profitable and demands a vastly different compensation model.

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The Bottom Line: AI Chip Profits Are Forcing a Reckoning

What’s happening at Samsung isn’t really about 15% vs. 13%.

It’s about how the massive windfall from the AI semiconductor boom should be distributed.

Workers are asking: If our division is generating record-breaking profits, shouldn’t we participate in those gains?

Management is asking: But how do we do that fairly across all divisions, and without locking ourselves into permanent obligations during cyclical commodity markets?

Meanwhile, the clock is ticking toward May 21.

Every day without a deal increases the probability of the first-ever Samsung Electronics strike in the company’s history—at the worst possible time for the global AI infrastructure boom.

The Samsung labor dispute is a window into a bigger question: As AI semiconductors generate unprecedented profits, how will those gains be distributed between capital and labor?

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References

• Aiming for SK Hynix’s 3.25 Million Yuan Bonus? Samsung Union Demands 7% Pay Rise, Threatens Strike – China News Service (Zhongxin Jingwei)
• Samsung Electronics workers threaten strike over bonus dispute – Financial Times
• Samsung Electronics union in South Korea calls first-ever strike – Reuters
• Samsung’s Biggest Union Calls for First-Ever Strike in Korea – Bloomberg