Threatening Chip Supply! Samsung's Largest-Scale Strike in History Enters Countdown

Samsung Electronics’ largest union threatens to launch an 18-day strike in May, potentially affecting about half of the world’s largest memory chip manufacturer’s capacity, adding new uncertainty to the already tight semiconductor supply chain driven by surging AI data center demand.

On March 17, Reuters reported that Samsung Electronics’ largest strike plan is entering a voting countdown. Choi Seung-ho, chairman of the Samsung Electronics Labor Union (SELU), stated last week that union members are voting on the strike plan for May, and he predicted “production disruptions are expected.” The voting ends this Wednesday, with approximately 90,000 union members eligible to participate, representing the vast majority of Samsung’s 125,000 employees in Korea.

If labor and management fail to reach an agreement, workers plan to strike for 18 days starting May 21. Choi Seung-ho said this action could impact about half of the output at Samsung’s Pyeongtaek semiconductor plant. An internal Samsung source cited in the report warned that “even a single strike” causing shutdowns could damage customer trust and take years to repair.

Wage Gap Widening Sparks Labor-Management Tensions

The core of this labor dispute lies in the ongoing widening wage gap between Samsung and its competitors. SELU’s demands include a 7% increase in base salary, the removal of the cap that performance-based pay cannot exceed 50% of the annual base salary, and the introduction of a profit-based bonus pool to replace the current standard, which union members consider “outdated and opaque.”

Choi Seung-ho pointed out that after SK Hynix accepted union wage reform demands in September last year, the number of Samsung union members increased significantly in the following weeks. SK Hynix approved a plan to remove the bonus cap and allocate 10% of operating profit into the bonus pool.

SELU’s calculations show that a Samsung chip department employee with a base salary of 76 million won would receive about 38 million won in performance pay in 2025, less than one-third of what an SK Hynix employee at the same salary level could earn. Over the past three months, more than 100 union members have left Samsung to join competitors like SK Hynix.

Strong Performance, Limited Willingness to Concede

Samsung Electronics posted its highest-ever profit in Q4 2025, with analysts expecting its full-year operating profit to surpass 200 trillion won (about $1.34 billion), more than tripling from the previous year. However, this impressive performance has not resolved internal labor-management conflicts.

In response to union pressure, Samsung issued an internal memo earlier this month proposing an “unprecedented” compensation plan: a 6.2% overall salary increase and a special bonus mechanism for the memory chip division—paying a bonus equivalent to 100% of the base salary for every 1 trillion won in annual operating profit.

A Samsung spokesperson stated that the company will “continue to engage in sincere dialogue with employees” and emphasized that semiconductor business profits fluctuate significantly, requiring a balance between future investments, shareholder returns, and employee compensation.

Lack of Labor Relations Experience May Worsen Risks

Analysts warn that Samsung’s lack of experience in labor relations management could amplify the potential impact of this conflict. Samsung workers staged their first strike in 2024, despite Samsung Chairman Lee Jae-yong’s 2020 promise to abandon the “union-free” image.

Seo Ji-yong, a business management professor at Sangmyung University in Korea, noted that unlike large Korean industrial conglomerates like Hyundai Motor, Samsung has long lacked the experience and expertise to manage union risks. He said, “If management clings to old thinking and ignores union demands, this dispute could dampen Samsung’s profitability momentum.”

Meanwhile, external talent competition is intensifying Samsung’s talent loss pressure. Choi Seung-ho said Tesla is attracting Samsung chip designers with generous benefits. In February, Tesla CEO Elon Musk publicly called on Korean chip industry workers to join Tesla, which is heavily investing in AI chips for autonomous vehicles and humanoid robots.

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