Samsung Electronics is facing the threat of a major worker walkout after unions demanded a bigger share of the company's AI-fueled semiconductor profits. Two Samsung unions are pushing for a seven percent pay rise and a bonus scheme worth 15 percent of each division's operating profits, with workers threatening an 18-day strike later this month if negotiations collapse.
Record Market Valuation
The standoff comes as the consumer tech giant rides an extraordinary rally, powered by soaring demand for AI memory chips. The South Korean behemoth this week hit $1 trillion market valuation for the first time, becoming the second East Asian firm after Taiwan Semiconductor Manufacturing to reach the milestone. Shares jumped more than 14 percent to a record high on Wednesday as investors piled into AI-linked semiconductor stocks. Samsung's first-quarter net profit surged almost sixfold year on year to £27 billion, driven overwhelmingly by its semiconductor arm, which produces memory chips used by Nvidia.
Workers Demand Permanent Profit Sharing
Tens of thousands of Samsung employees rallied outside the company's vast Pyeongtaek semiconductor complex last month, with unions arguing staff are being left behind while AI demand sends profits soaring. A person familiar with negotiations said Samsung had offered workers bonuses equivalent to roughly 13 percent of operating profit, but unions are demanding the payouts become permanent contractual entitlements rather than one-off rewards. Woo Ha-kyung, acting chair of the National Samsung Electronics Union, said talks had stalled because management refused to formally lock the profit-sharing arrangement into company rules. Samsung said it would "continue to make efforts to reach an agreement with the union."
Potential Impact on AI Chip Supply
The dispute is being closely watched by investors because a prolonged strike could hit already strained global chip supply chains at a critical moment for the AI industry. AI companies have spent the last year scrambling to secure long-term supplies of advanced memory chips, helping drive prices sharply higher. Professor Kwon Seok-joon of Sungkyunkwan University estimated an 18-day strike could cost Samsung between 10 trillion won (£5 billion) and 17 trillion won (£8.5 billion) in direct losses alone. "The bigger damage is indirect," he warned, as Samsung tries to strengthen its position as a contract chipmaker and win trust as a supplier of next-generation chips to Nvidia.
