Samsung Electronics' largest labor union is threatening an 18-day strike in May, which could impact approximately half of the production capacity at the world's biggest memory chip manufacturer. This move introduces new uncertainties into the already tight semiconductor supply chain, strained by surging demand from AI data centers.

On March 17, reports indicated that the countdown has begun for a vote on what could be Samsung's largest-ever strike. Last week, Choi Seung-ho, head of the Samsung Electronics Labor Union (SELU), stated that union members are voting on the proposed May strike, adding that "production disruptions are expected." The voting period closes this Wednesday, with around 90,000 union members eligible to participate—representing the vast majority of Samsung's 125,000 employees in South Korea.

If management and labor fail to reach an agreement, workers plan to begin an 18-day strike starting May 21. According to Choi, the action could affect roughly half of the output at Samsung's Pyeongtaek semiconductor campus. An internal Samsung source noted that even a single strike could damage customer trust and take years to repair.

The core of the labor dispute lies in the widening pay gap between Samsung and its competitors. SELU's demands include a 7% increase in base salary, removal of the cap that limits performance-based pay to no more than 50% of annual base salary, and the introduction of a bonus pool tied to operating profit—replacing what the union deems an "outdated and opaque" current system.

Choi pointed out that after SK Hynix accepted union demands for pay reform in September last year, Samsung's union membership saw a significant increase in the following weeks. SK Hynix approved a plan that eliminated the bonus cap and allocated 10% of operating profit to a bonus pool.

SELU estimates show that a Samsung chip division employee with a base salary of 76 million won would receive performance-based pay of about 38 million won in 2025—less than one-third of what a similarly paid SK Hynix employee would earn. Over the past three months, more than 100 union members have left Samsung to join competitors like SK Hynix.

Samsung Electronics posted record profits in the fourth quarter of 2025, and analysts expect its full-year operating profit to exceed 200 trillion won (approximately $134 billion), more than triple the previous year’s figure. However, strong performance has not resolved internal labor tensions.

In response to union pressure, Samsung earlier this month proposed what it called an "unprecedented" compensation package in an internal memo: an overall salary increase of 6.2%, plus a special bonus mechanism for the memory chip division—offering a bonus equivalent to 100% of base salary for every 100 billion won in annual operating profit achieved.

A Samsung spokesperson stated that the company will continue dialogue with employees "in good faith," emphasizing that semiconductor profits are highly volatile and that a balance must be struck between future investment, shareholder returns, and employee compensation.

Analysts warn that Samsung's lack of experience in labor relations could amplify the potential impact of the conflict. Samsung workers staged their first-ever strike in 2024, after Chairman Lee Jae-yong pledged in 2020 to abandon the company's "no-union" image.

According to Seo Ji-yong, a business administration professor at Sangmyung University, unlike other major South Korean industrial groups such as Hyundai Motor, Samsung has long lacked experience and expertise in handling union-related risks. He stated, "If management sticks to old thinking and ignores union demands, this dispute could cool Samsung’s profit momentum."

At the same time, external talent competition is increasing pressure on Samsung’s workforce. Choi noted that Tesla is actively recruiting Samsung chip designers with attractive compensation packages. In February, Tesla CEO Elon Musk publicly encouraged workers in South Korea’s chip industry to apply to join Tesla, which is aggressively expanding its AI chip business for autonomous vehicles and humanoid robots.