More than 45,000 Samsung Electronics workers are threatening to launch the largest strike in the South Korean conglomerate’s history, beginning 21 May 2026.
The dispute centres on how Samsung distributes bonus payments between its highly profitable memory chip division and its loss-making logic chip businesses.
Samsung has offered memory chip employees bonuses worth 607 percent of their annual salary, far exceeding rival SK Hynix’s recent payouts to staff.
Workers in the logic chip division, responsible for producing AI chips for clients including Tesla and Nvidia, would receive between 50 percent and 100 percent only.
The union argues this gap is deeply unfair, as logic and memory chip employees frequently work side by side within the same Samsung facilities.
Potential Financial Impact
JPMorgan has estimated the strike could reduce Samsung’s operating profit by between 21 trillion won and 31 trillion won, equivalent to $14.08 million to $20.79 million.
Additional sales losses from the industrial action could reach approximately 4.5 trillion won, according to JPMorgan’s financial analysis of the dispute.
Samsung’s Device Solutions Division encompasses 3 main businesses including memory, system LSI, and foundry whose profitability has diverged sharply during the global AI boom.
Wage Gap at the Heart of the Dispute
Samsung’s memory and logic chip divisions previously operated under an identical bonus structure, but the AI-driven surge in memory demand has changed that policy.
SK Hynix removed its bonus cap in 2024, awarding its workers bonuses more than 3 times higher than those received by comparable Samsung employees.
This disparity led some Samsung engineers to defect to SK Hynix and other competitors, accelerating a talent drain that union leaders say is worsening.
Union leader Choi Seung-ho warned during negotiations that stark pay differences would destroy motivation among foundry workers who already face difficult and demanding conditions daily.
A foundry engineer based in Pyeongtaek, identified only as Lee, said his team has shrunk considerably over recent years due to internal and external departures.
Samsung’s Defence
Samsung negotiators argue that performance bonuses must reflect actual business results and cannot be awarded equally regardless of each division’s financial contribution or profitability.
Executive and negotiator Kim Hyung-ro stated the logic chip business posted losses worth trillions of won and effectively survived only through support from memory division earnings.
Samsung said in a formal statement that the logic chip business remains strategically significant and that the company continues to invest in its long-term development.
The company also stated it intends to offer employees what it described as the best compensation package available anywhere across the entire semiconductor industry.
Broader Corporate Concerns
Yonsei University professor Namuh Rhee said Samsung’s decision to combine multiple distinct businesses under one structure created conflicts of interest and reduced its overall market valuation.
Rhee stated publicly that Samsung’s foundry division must be made self-reliant if the company is to resolve its internal structural tensions and compete globally.
The union is demanding that Samsung abolish its 50 percent annual salary bonus cap and direct 15% of annual operating profit into a shared worker bonus pool.
Samsung Chairman Jay Y. Lee has publicly stated his ambition for Samsung to become the clear global leader in logic chip manufacturing by the year 2030.
