Union calls strike at S. Korea chip giant Samsung Electronics
A union representing 50,500 workers at Samsung Electronics announced a 18-day strike starting May 20 after bonus negotiations collapsed, threatening production of AI chips and consumer electronics. The strike risks severe economic disruption, as semiconductors account for 35% of South Korea’s exports, and could halt mass production of HBM4 chips critical for AI infrastructure.
A labor union at Samsung Electronics, South Korea’s largest chipmaker, declared a 18-day strike beginning May 20 after failing to reach an agreement with management over bonus payouts. Around 50,500 workers will walk off production lines, dwarfing a 2024 strike that involved 6,000 employees, and raising concerns about supply chain disruptions for AI and consumer electronics. The union demanded Samsung scrap a 50% bonus cap and allocate 15% of annual operating profit to bonuses, citing the company’s record profits and 400% share surge over the past year. Samsung rejected these demands, stating they would undermine its management principles, while the government warned of ‘unimaginable’ economic damage, as semiconductors make up 35% of South Korea’s exports. The strike coincides with Samsung’s mass production of HBM4 chips, a key component for AI data centers, and follows the company’s first-quarter record profits driven by AI demand. The union argues past production stoppages for maintenance have occurred, but experts warn even partial disruptions could harm the export-driven economy. South Korea’s Prime Minister Kim Min-seok has signaled the government may invoke emergency mediation powers to halt the strike if deemed a national threat. Samsung, historically anti-union under founder Lee Byung-chul, formed its first labor union in the late 2010s, but tensions persist over profit-sharing amid the AI-driven boom.
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