Tens of thousands of employees from Samsung Electronics gathered at the company's Pyeongtaek facility in South Korea on Thursday, signaling their readiness to initiate an 18-day strike next month. Central to this dispute is a demand for improved financial compensation.
The workers' union is advocating for the elimination of the performance bonus cap and a commitment to allocate 15% of operating profits directly to the workforce. Negotiations have reached an impasse, with Samsung responding to the union's demands both in court and during discussions.
In contrast, rival chip manufacturer SK Hynix is reportedly preparing to offer its 35,000 employees average bonuses around $400,000 next year. Although Samsung has proposed compensation that exceeds its competitors, the union has rejected this offer, according to local media.
Samsung has historically been regarded as South Korea's most desirable employer, but the disparity in bonuses with SK Hynix is beginning to challenge this status. Interestingly, not all employees at the rally are aligned with the union's stance; some shareholders expressed their concerns across the street, accusing workers of jeopardizing the company during a critical period.
The timing of this unrest is particularly significant for Samsung. The surge in AI technology has triggered a global chip shortage, with leading memory chip producers--including Samsung, SK Hynix, and Micron--racing to satisfy the soaring demand from AI data centers. These companies have shifted resources from consumer products to focus on high-bandwidth memory chips, which offer significantly higher profit margins.
Currently, AI data centers are estimated to consume about 70% of the world's high-end memory chips, leaving consumers to contend for the remaining supply. As a result, prices for standard memory chips, such as DRAM, have soared since early 2025.
If Samsung's more than 35,000 workers proceed with their strike next month, the ramifications could extend to Silicon Valley, exacerbating the existing memory chip shortage.
