Wafer capacity has dropped by 58%, memory output has fallen by 18%! Samsung’s labor crisis escalates further, with an 18-day general strike entering the countdown.
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Samsung Electronics is facing an increasingly heated labor-management confrontation. The wave of artificial intelligence has pushed the company’s profits to historical highs, and the union is leveraging this momentum to press management for a greater share of AI gains, using the threat of large-scale strikes, which have already caused real disruption to core chip production lines.
The Samsung union claims that during the night shift on April 23, due to workers attending rallies, wafer foundry output plummeted by about 58%, and memory chip output dropped by about 18%. Samsung declined to comment on the production losses. The union also warned that if negotiations break down, a large-scale strike lasting 18 days will be launched starting May 21.
Reportedly, about 30,000 to 40,000 people gathered outside Samsung's Pyeongtaek semiconductor base for the rally. The union demands that 15% of the company’s annual operating profit be distributed as bonuses to chip division employees, totaling more than KRW 40 trillion (about USD 27 billion), which means more than USD 400,000 per employee on average. A Samsung spokesperson said the company will continue its efforts to reach a salary agreement as soon as possible.
The deeper cause behind the strike risk is Samsung’s explosive performance growth—the company expects its Q1 2026 operating profit to rise by about 700% year-on-year, and analysts further predict it may surpass NVIDIA in 2027, becoming the world’s most profitable company. The gap between profits and pay has become the core tension in this labor-management standoff.
Union Demands and Management’s Position
The largest Samsung union demands that 15% of annual operating profit be placed in a bonus pool and distributed to chip division employees. Reportedly, this amount exceeds KRW 40 trillion (about USD 27 billion), translating to over USD 400,000 per worker on average. The union is also demanding a 7% salary increase.
Samsung management’s current proposal: 10% of operating profit for bonuses, plus a 6.2% salary increase, and a package of benefits including favorable mortgage loan support. This proposal has been rejected by the union.
Choi Seung-ho, head of the largest Samsung union, stated at the rally:
"Every year the company talks about crisis, but during those crises, it’s not the management that supports Samsung Electronics, it’s the workers—it’s the union members who make products, improve processes, work overnight, and improve yields, making the company a global leader in semiconductor manufacturing."
The union uses rival SK Hynix’s distribution plan as a reference. Reportedly, SK Hynix agreed last year to put 10% of its annual operating profit into the performance bonus pool.
The production stoppage effect of this rally has clearly signaled the potential scale of impact if a full strike occurs. A single rally caused one shift’s wafer foundry output to drop about 58%, and memory chip output to drop about 18%—with wafer lines especially hit due to higher labor intensity.
By comparison, the union's last strike in 2025 lasted only three days, with relatively manageable impact on production. This time, the union threatens an 18-day strike—from May 21 to June 7—which, if carried out, would far exceed previous scales and durations, making the potential impact on Samsung's supply chain incalculable.
Surging Performance Boosts Union’s Bargaining Power
The key backdrop for intensifying labor tension is Samsung’s explosive business growth. In recent years, Samsung, SK Hynix, and Micron have accelerated the production of high bandwidth memory (HBM) for NVIDIA AI accelerators, and this year Samsung was the first to commercially deliver next-generation HBM4 to customers. The company projects total sales in Q1 2026 to reach KRW 133 trillion (about USD 88.2 billion), well above the market consensus of KRW 116.81 trillion; operating profit is expected at about KRW 57.2 trillion (about USD 37.8 billion), up about 700% year-on-year, and up about 184% quarter-on-quarter from KRW 20.1 trillion in Q4 2025.
KB Securities analysts project Samsung’s 2026 full-year operating profit will reach KRW 327 trillion, rising further to KRW 488 trillion in 2027, when it is expected to narrowly surpass NVIDIA to become the world’s most profitable publicly listed company.
This conflict reflects deep changes in Samsung’s internal power structure. For decades, Samsung managed to keep its distance from unions; but in recent years, organized labor groups have gained a stronger foothold inside the company, enabling employees to express demands more openly.
The next critical negotiation node is May 21. If management and union fail to reach agreement by then, Samsung’s core position in the global AI supply chain will face a direct test.
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