By Hyunjoo Jin
PYEONGTAEK, South Korea, March 17 (Reuters) – The biggest workers’ union at South Korea’s Samsung Electronics has threatened to disrupt chip production as members vote on a plan to strike in May, its leader told Reuters.
A strike at the world’s largest maker of memory chips could worsen bottlenecks in global supply of semiconductors stemming from robust demand for AI data center operations that has curbed supply to industries from cars and computers to smartphones.
“I expect there would be production disruption,” Choi Seung-ho, who leads the Samsung Electronics Labour Union (SELU), said last week.
If the workers fail to strike a deal, they plan to strike for 18 days from May 21, he said, adding that could affect about half the output at Samsung’s sprawling semiconductor complex in Pyeongtaek, south of Seoul, the capital.
A Samsung spokesperson said the company would continue its dialogue with employees “in a sincere manner.”
Samsung employees’ growing frustration over a pay gap with key rivals drove a surge in membership of the union in the weeks after chipmaker SK Hynix <000660.KS> accepted its union’s demand for compensation reforms in September, Choi said.
“The chip industry is booming, but those gains aren’t trickling down to us. That’s why we’re fighting.”
In the past three months, more than 100 union members have left South Korea’s biggest employer for firms such as SK Hynix, which approved a plan to lift its bonus cap and devote 10% of operating profit to a bonus pool, Choi said.
The Samsung union seeks an increase of 7% in base wage, the scrapping of a cap on performance pay at 50% of annual base salary and the introduction of a bonus pool based on operating profit to replace criteria the union calls outdated and opaque.
About 90,000 unionised workers from Samsung’s South Korean workforce of 125,000 are eligible to cast ballots in voting that runs until Wednesday.
The SELU, the first majority Samsung union, has roughly 66,000 members, including 51,000 from its chip division. Samsung also has smaller labour unions.
Samsung posted record fourth-quarter profit in 2025 and analysts expect annual operating profit to more than quadruple to over 200 trillion won ($134 billion) this year.
In an internal memo to employees early this month, Samsung said it tried to reach a 2026 wage deal by offering “unprecedented” compensation proposals, such as a pay increase of 6.2% and special bonuses.
Lifting the bonus cap would make it hard for Samsung to finance future investments in the capital-intensive, cyclical industry, a company official told Reuters.
“If even a single strike halts production lines and damages trust with customers, it could take years” to recover, the official said, speaking on condition of anonymity as the issue is a sensitive one.
‘LACKING LABOUR RELATION EXPERIENCE’
Workers of Samsung Electronics first walked out in 2024, after Chairman Jay Y. Lee pledged to shed its reputation of a “no-union” policy in 2020.
The group had long been free of union risks, unlike other major Korean industrial groups, such as Hyundai Motor, leading to a lack of experience and expertise in managing labour relations, said Seo Ji-yong, a business administration professor at Sangmyung University.
“If the management is stuck in the past and ignores union demands, the disputes could throw cold water on Samsung’s earnings momentum,” he said.
A Samsung chip division employee with a base pay of 76 million won ($50,800) would receive 38 million in performance pay for 2025, or less than a third of the figure a similarly-paid SK Hynix employee would qualify for, the SELU says.
The gap would widen this year, if the current bonus scheme continues, it said.
“If we’re number one, we should be treated like number one,” Choi said, adding that Tesla was also wooing its chip designers with generous offers. “This will motivate employees to work harder and raise Samsung’s competitiveness.”
In February, Chief Executive Elon Musk urged workers in the Korean chip industry to apply for jobs at Tesla, as it makes a big push into AI chips used in self-driving cars and humanoid robots.
($1=1,496.7200 won)
(Reporting by Hyunjoo Jin; Editing by Miyoung Kim and Clarence Fernandez)
Comments