South Korea’s Samsung Electronics is facing its largest potential labour action in years, with tens of thousands of workers preparing for a prolonged strike over bonuses and profit-sharing at a time when the company is benefiting from a global artificial intelligence (AI) driven chip boom.
The strike action is scheduled to begin on 21 May, with workers planning an initial 18-day industrial action period if no agreement is reached.
The dispute has raised concerns about possible disruptions to semiconductor production and the broader memory chip supply chain.
Samsung’s labour union is calling for major changes to the company’s bonus system.
The union wants Samsung to abolish its current cap that limits performance bonuses to 50% of annual salaries. It is also demanding that 15% of annual operating profit be allocated to a bonus pool distributed among employees.
It further wants these changes to be made permanent and written into binding agreements rather than offered as temporary or one-off payments.
Union representatives say the current system does not reflect Samsung’s strong profitability in the AI-driven semiconductor cycle and argue that employees should receive a larger share of gains.
They also point to compensation practices at rival SK Hynix, which union officials say has expanded its bonus payouts after restructuring its incentive system in recent years.
Samsung has rejected calls to remove the bonus cap.
Instead, the company has proposed one-off bonus increases for this year. Under its proposal, memory chip employees would receive higher bonuses than those at SK Hynix, while employees in logic chip and foundry businesses would receive bonuses ranging from 50% to 100% of annual salary, depending on performance.
Samsung has said compensation should reflect business performance across divisions and argued that different business units contribute differently to profitability.
The company has also warned that a strike could disrupt production and damage customer confidence at a time of strong global demand for memory chips.
The dispute comes during a period of strong profitability for Samsung’s semiconductor business, driven by rising demand linked to AI applications and global supply constraints.
Union leaders say dissatisfaction has increased due to perceived pay disparities with SK Hynix. They cite significantly higher bonus levels at the rival chipmaker, although those figures are based on union statements and industry reporting rather than independently verified company-wide comparisons.
The issue has also highlighted internal tensions between Samsung’s memory, logic chip, and foundry divisions, which have performed unevenly in recent years.
Samsung’s union says nearly 48,000 workers (around 38% of Samsung Electronics’ domestic workforce) have signed up to participate in an 18-day strike, most of them in chip-related roles.
A court has partially granted Samsung’s request for an injunction requiring minimum staffing levels at key facilities during any strike. This means a portion of employees would still be required to work even if industrial action proceeds.
Samsung’s semiconductor plants in South Korea operate around the clock, making sustained disruption potentially more significant than previous labour actions at the company.
At the same time, talks between management and the union are ongoing, with government mediation also under consideration.
Authorities have indicated they could impose emergency arbitration, which would suspend strike action for up to 30 days to allow negotiations to continue.
Analysts say a prolonged strike could disrupt global memory chip supply, though estimates vary and remain uncertain.
Research firms and brokerage analysts have suggested that an 18-day disruption could reduce output of DRAM and NAND chips by a few percentage points, potentially tightening already sensitive global markets driven by AI demand.
South Korean government officials have also warned about the impact of a strike as Samsung accounts for nearly a quarter of Korea's exports.
The Bank of Korea has said a severe disruption scenario could reduce national economic growth, depending on the scale and duration of lost production, although such estimates are conditional.
For investors, the key concern is not only short-term production losses, but whether any settlement leads to permanently higher labour costs if bonus structures are formally revised.
An official at South Korea's central bank has said that a strike could, in a worst-case scenario, shave 0.5 percentage points off a forecast 2.0% expansion in the South Korean economy this year.
This assumes that around 30 trillion won ($19.9 billion) of chip production could be lost and that there might be an additional "few weeks" of disruption to production, the person said.
Negotiations are continuing under pressure from the South Korean government, which has urged both sides to reach a compromise to avoid wider economic disruption.
A deal remains possible if both sides agree on enhanced bonuses without removing the existing cap system.
If talks fail, Samsung could face one of the most significant labour actions in its history, with potential implications for global semiconductor supply chains and South Korea’s export performance.
Demand for electric vehicles has surged across Europe as elevated fuel prices linked to the Iran conflict push consumers toward new and second-hand...
Azerbaijan is presenting its experience in smart and sustainable urban development through concrete projects across the urban value chain, official...
Russian attacks killed two people and injured 19 across Ukraine overnight, local officials said on Wednesday, while K...
Two Chinese tankers laden with oil exited the Strait of Hormuz on Wednesday, shipping data showed, brightening ...
Day four of the World Urban Forum (WUF) in Baku brings a packed agenda on sustainable cities and the global housing crisis, with sessions on green ...
Demand for electric vehicles has surged across Europe as elevated fuel prices linked to the Iran conflict push consumers toward new and second-hand EVs, according to data shared with Reuters. It is providing a boost to an auto industry that has struggled with slower-than-expected adoption.
Azerbaijan is presenting its experience in smart and sustainable urban development through concrete projects across the urban value chain, officials said at a session held during the 13th World Urban Forum (WUF13) in Baku.
Russian attacks killed two people and injured 19 across Ukraine overnight, local officials said on Wednesday, while Kyiv launched drone strikes targeting industrial sites in central Russia.
Two Chinese tankers laden with oil exited the Strait of Hormuz on Wednesday, shipping data showed, brightening hopes that the U.S.-Israeli conflict with Iran may soon be resolved after positive comments from the U.S. President and his Deputy.
The World Urban Forum (WUF13) continues in Baku, Azerbaijan on 18 May, addressing the global housing crisis. The day’s agenda includes the official opening press conference, the WUF13 Urban Expo opening and a ministerial dialogue on the Nairobi Declaration to advance Africa's urban agenda.
United Nations World Urban Forum 13 continues in Baku, Azerbaijan on 19 May with sessions and roundtable discussions focused on strengthening dialogue and advancing cooperation in urban development. Organisers say there are nearly 3 billion people globally who face some form of housing inadequacy.
A 5.2 magnitude earthquake struck China’s Guangxi region early on Monday, killing two people and forcing more than 7,000 residents in Liuzhou to evacuate as rescue efforts continued.
Azerbaijan and Georgia have agreed to resume daily passenger train services on the Baku-Tbilisi-Baku route from 26 May, 2026, marking a major step in restoring regional rail connectivity after services were suspended in 2020 due to the COVID-19 pandemic.
Pakistan has deployed around 8,000 troops, fighter jets and air defence systems to Saudi Arabia under a mutual defence agreement, according to security officials and government sources familiar with the arrangement.
Demand for electric vehicles has surged across Europe as elevated fuel prices linked to the Iran conflict push consumers toward new and second-hand EVs, according to data shared with Reuters. It is providing a boost to an auto industry that has struggled with slower-than-expected adoption.
Government bond markets from Tokyo to New York extended losses on Monday (18 May) as rising energy prices linked to the Middle East conflict heightened inflation concerns and reinforced expectations that major central banks could keep interest rates higher for longer.
Negotiations between Samsung Electronics and its workforce on Wednesday have broken down, officials said, raising fresh concerns over potential disruption to South Korea’s export-heavy economy.
By the time American shoppers began noticing higher prices on everything from trainers to televisions, the world's two largest economies were already deep in a trade war that left the world wondering how it would end.
The Strait of Hormuz remains a vital maritime chokepoint and serves as the primary artery linking the Persian Gulf to international energy markets. With approximately 20% of global oil and gas shipments transiting this waterway, it is the backbone of energy security for Asia, Europe, and beyond.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment