Samsung labor dispute could worsen memory chip supply problems

Tens of thousands of Samsung Electronics employees held a rally at South Korea’s Pyeongtaek campus on Thursday, indicating they are ready to walk off the job for an 18-day strike next month. The core of the conflict is over money.

The union is calling on Samsung to remove caps on performance bonuses and direct 15% of operating profits to employees. Samsung does not agree, and negotiations have stalled. Meanwhile, electronics giants are battling unions in court and at the bargaining table.

Rival chipmaker SK Hynix reportedly plans to pay an average bonus of about $400,000 each to its 35,000 employees early next year. Local media reports say Samsung has offered workers in its memory chip division higher compensation than rival companies, but unions have so far rejected the offer.

A Samsung spokesperson did not respond to a request for comment prior to publication. Samsung has long been South Korea’s most coveted employer. The bonus difference with SK Hynix is ​​putting pressure on their advantage.

Not all participants at the rally were on the trade union side. Shareholders also gathered across the street to accuse workers of weakening the company at a critical juncture.

Bad timing for Samsung. The AI ​​boom has created a chip shortage, with the world’s top three memory chip makers, Samsung, SK Hynix, and Micron, competing to meet the demand for AI data centers. The companies have redirected resources from their consumer businesses to making high-bandwidth memory chips for AI applications, which have much higher profit margins.

AI data centers are currently consuming an estimated 70% of the high-end memory chips produced worldwide, leaving consumers to compete for the rest. The price of conventional memory chips such as DRAM has been rising since early 2025.

If more than 35,000 Samsung Electronics employees go on strike next month, the ongoing memory chip shortage could become even more severe, with ripples felt across Silicon Valley.