The labor union at Samsung Electronics announced on Wednesday that it will move ahead with a major strike after negotiations with management over bonus payments collapsed.
The strike is scheduled to begin on Thursday and is expected to be much larger than the 2024 walkout, which involved around 6,000 workers at the world’s biggest memory chipmaker.
According to the union’s lawyer, nearly 50,500 employees are expected to stop work for 18 days after talks with company management failed. The union said it accepted a mediation proposal from South Korea’s National Labor Relations Commission on May 19, but Samsung management rejected it.
The workers are demanding a larger share of the company’s profits following a massive rise in Samsung’s stock price during the AI boom. The union asked Samsung to remove a bonus cap equal to 50% of annual salaries and allocate 15% of annual operating profits toward employee bonuses.
Samsung management rejected the demands, saying accepting them would damage the company’s management principles. The company also said a strike should not happen under any circumstances.
The planned walkout has raised concerns in South Korea because semiconductors account for about 35% of the country’s exports and play a major role in the national economy.
Prime Minister Kim Min-seok warned that the economic damage from a prolonged strike could be extremely serious. The government is also considering emergency mediation powers that could temporarily stop industrial action if it is seen as a threat to the economy.
Samsung is one of the world’s largest producers of chips used in artificial intelligence systems, data centers, smartphones, and consumer electronics. The company recently started mass production of its next-generation HBM4 memory chips, which are considered important for AI infrastructure.
The strike comes during a period of strong growth for South Korea’s technology sector. Samsung’s shares have risen nearly 400% over the past year, while rival chipmaker SK hynix has seen its stock jump around 780%. Samsung’s market value also passed $1 trillion for the first time earlier this month.
Both Samsung and SK hynix reported record profits in the first quarter, driven by strong global demand for AI-related chips.
Samsung has historically been strongly opposed to labor unions. Founder Lee Byung-chul once said he would never allow unions during his lifetime. However, Samsung Electronics’ first labor union was eventually formed in the late 2010s.
