Samsung Faces the Largest Strike Threat in History

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Source: Beijing Business Today

At a critical moment when the AI semiconductor race is heating up, Samsung is facing its most severe labor dispute in history. On March 18, the “Joint Struggle Headquarters” composed of multiple Samsung labor unions announced that the strike vote held since March 9 received overwhelming support, with an approval rate of 93.1%.

The unions plan to initiate an 18-day general strike in late May. In the current wave of global data center construction boosting semiconductor demand, this move could cause significant disruptions to the global AI semiconductor supply chain. Industry estimates suggest that if the strike proceeds, Samsung Electronics could face total losses of 5 trillion to 9 trillion Korean won (approximately 23.12 billion to 41.62 billion RMB). These include wafer scrap due to production halts, penalties for delayed deliveries, and maintenance costs for key equipment shutdowns.

According to reports, the three unions involved in the vote include the Samsung Group United Union, which has over 60,000 members, the Samsung Electronics branch, and the Samsung Electronics Labor Union, representing over 90,000 members in total. Of these, 66,019 members participated in the vote, with a turnout of 73.5%, and 61,456 voted in favor.

This voting outcome marks a complete escalation of conflicts between labor and management over wages and benefits.

Public information shows that the unions’ core demands include: transparency in performance bonus calculations, abolition of the performance bonus (OPI) cap, and a 7% increase in base salary.

With the arrival of a memory supercycle, Samsung Electronics’ consolidated sales in Q4 2025 are projected to reach about 93 trillion KRW, with an operating profit of around 20 trillion KRW and a net profit of approximately 19 trillion KRW, setting a quarterly performance record.

The focus of negotiations is on bonus distribution. Previously, Samsung’s competitor SK Hynix eliminated the 50% annual bonus cap and pledged to allocate 10% of operating profit for employee dividends. A Samsung union representative stated in an interview that, although the semiconductor industry is experiencing prosperity, “these profits are not flowing to us.”

Before the vote results were announced, Samsung management proposed a 6.2% salary increase and the issuance of 20 company shares. However, unions pointed out that amid surging demand for AI chips, these proposals did not address the core issue of fair distribution.

According to the union’s subsequent action plan, April 23 will be a key milestone before the strike. The union plans to hold a large-scale assembly at Samsung’s semiconductor manufacturing base in Pyeongtaek. A union leader warned in a media interview that half of the production at the Pyeongtaek plant could be affected.

At the recent NVIDIA GTC conference, Hwang Sang-jun, Vice President and Head of Memory Development at Samsung Electronics, mentioned the Pyeongtaek plant, stating that the inference chip Groq 3 is being produced there, with mass production targeted for late Q3 to early Q4 this year, and order volume exceeding expectations.

If negotiations remain stalled in April, the union has set the window for a total strike from May 21 to June 7, lasting 18 days, continuing to demand normal performance bonuses and a fair compensation system.

If the strike occurs, it will be Samsung Electronics’ second strike since its founding in 1969 and the first since July 2024, marking a two-year gap.

Industry analysts have differing opinions on the impact of the strike. One analyst said that past strikes did not affect Samsung’s storage capacity release. Semiconductor storage is highly automated, with more personnel in backend packaging, testing, and logistics. They expect this event to have little impact on Samsung’s storage production.

However, some analysts believe that, unlike before, this strike hits at the explosive growth point of the AI industry and directly targets Samsung’s lifeline—the Pyeongtaek semiconductor complex—since many union members are involved in production line maintenance, equipment inspection, and yield management.

Semiconductor fabs are highly dependent on continuous operation. Even a few hours of shutdown due to labor shortages can require months of recalibration and yield recovery, posing a challenge for advanced processes still ramping up capacity.

This year is critical for Samsung’s collaboration with NVIDIA. Last month, Samsung announced that its HBM4 memory has entered mass production and is being supplied to customers. Any delays caused by the strike could directly impact the global AI data center construction schedule. Additionally, with Samsung holding about 40% of the global DRAM market, an 18-day strike could cause short-term fluctuations in DRAM prices worldwide.

Meanwhile, recent tensions in the Middle East have caused a surge in international oil prices and increased costs for raw materials. Coupled with potential disruptions in semiconductor equipment and materials supply chains, the operational uncertainty for chip manufacturers like Samsung is rising sharply.

If Samsung falls behind, downstream major clients may reassess supply chain security and shift to competitors to hedge risks, which could further increase costs for smartphones and servers.

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Editor: Gao Jia