Nearly 40,000 Samsung Electronics workers rallied on Thursday demanding a bigger share in the company’s rising profits.
The unions warned they could launch an 18-day strike if their demands were not met, potentially disrupting production of chips needed to feed the growing AI industry.
The South Korean giant said it will continue efforts to reach a swift agreement in the ongoing wage talks.
What are the demands of Samsung Union?
Samsung unions said the company failed to offer adequate pay packages despite its strong performance. Samsung shares have surged nearly 300% in the past year due to demand for AI chips.
The unions want Samsung to lift the cap on bonus pay, among other demands. At present the limit is set at 50% of the annual base salary.
The unions say a chip division employee earning 76 million won ($51,000, €44,000) will get a 2025 bonus of 38 million won ($26,000, €22,000). This is less than a third of what an employee in a similar role at rival company SK Hynix would be paid. Last September, SK Hynix agreed to eliminate its bonus limits.
SK Hynix is a direct competitor of Samsung Electronics. The two South Korean companies together produce about two-thirds of the world’s memory chips.
SK Hynix overtook Samsung to become Nvidia’s main supplier of high-bandwidth memory (HBM) chips following the launch of ChatGPT in 2022.
Strike threatens supply of AI chips
Samsung has rejected the union’s demand to lift bonus limits, but said it would offer additional funding so that workers at its memory division, which develops memory chips, earn more than competitors this year.
If the talks fail, the unions are planning an 18-day strike from May 21. He says the production halt could cost the company more than 1 trillion won ($700 million, €600 million) per day.
Samsung executives say even a small disruption can damage customer trust and take years to recover.
Chipmakers have benefited from the AI boom, but the Middle East conflict has raised concerns about supply chains. The crisis has restricted access to key materials such as helium and driven up energy costs.
Samsung, long known for opposing unions, could see its first employee strike in 2024.
Edited by: Alex Berry