Samsung Electronics is now facing great pressure when more than 45,000 of its employees threaten to launch the largest strike in the company's history. The action comes as Samsung enjoys a surge in profits due to the global AI chip boom.
Samsung reportedly recorded an operating profit of around 57 trillion won, equivalent to about RM183 billion, driven by high demand for AI memory chips for data centers, smartphones and laptops. The demand was also contributed by major technology customers such as NVIDIA, Tesla and Google.
More than 45,000 employees are expected to join the 18-day strike starting May 21 if negotiations fail to reach an agreement.
Memory Chip and Logic Chip Dilemma
The main dispute focuses on the issue of employee bonuses between Samsung's two main semiconductor divisions, namely memory chips and logic chips.
Samsung plans to give very high bonuses to about 27,000 memory chip employees, with payments reaching 607% of annual salaries. The division has been a major contributor to the company’s profits throughout the AI boom as Samsung is the world’s largest producer of memory chips.
But workers in its foundry and logic chip units, which produce AI chips for customers such as Tesla and NVIDIA, are only being offered bonuses of around 50% to 100% of their annual salaries. Unions say the compensation gap is too wide even though both units are involved in the same AI supply chain.
They also warn that many skilled workers are leaving Samsung to join competitors such as SK hynix and Micron Technology, which offer higher compensation.
Samsung has defended its existing bonus structure, arguing that its foundry and logic chip divisions have been losing billions of won in recent years. Profits from memory chips are being used to fund major investments in future AI chip technology development.
The tensions have also drawn the attention of the South Korean government, as the semiconductor sector accounts for more than a third of the country’s exports.
Markets are also worried that a prolonged strike could disrupt the global chip supply chain at a time when AI demand is still booming. JPMorgan Chase estimates that the strike could cost Samsung up to US$20 billion in profits due to chip production disruptions and delays in deliveries to global customers.
