Samsung Faces Largest Strike in History as 45,000 Workers Walk Out Over AI Profit Share

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SEOUL — Samsung Electronics is facing the largest labor strike in its 88-year history as more than 45,000 workers walked off the job on May 21, demanding a fairer share of the company’s artificial intelligence-driven profits. The 18-day strike at Samsung’s Pyeongtaek semiconductor campus threatens to disrupt global supply chains for AI memory chips already under intense demand.

The strike, organized by the National Samsung Electronics Union (NSEU), follows months of failed negotiations over bonus structures that workers say unfairly favor the memory chip division over colleagues in logic chip and foundry operations. Despite government-mediated talks that ran until 3 a.m. on May 13, both sides failed to reach an agreement.

At the heart of the dispute is a fundamental question of the AI era: who gets to share in the historic profits generated by the semiconductor boom? Samsung’s memory chip business has seen earnings surge nearly 50-fold year-over-year in Q1 2026, driven by insatiable demand for DRAM and HBM chips used in AI data centers worldwide. Management offered memory workers bonuses of up to 607% of annual salary — while foundry and logic chip employees, who build custom AI silicon for clients like Nvidia and Tesla, were offered just 50% to 100%.

“If the memory division gets 500 million won while the foundry division only gets 80 million won, what motivation would those employees have to keep working?” said union leader Choi Seung-ho during negotiations, according to transcripts reviewed by Reuters.

The union is demanding Samsung abolish its current 50% cap on performance bonuses, allocate 15% of annual operating profit to a bonus pool distributed to all workers, and provide a 7% base wage increase. Management offered 10% of operating profit and a 6.2% pay raise but refused to guarantee annual payouts, calling the union’s demands “unsustainable in the long term.”

Global Supply Chain at Risk

The potential impact extends far beyond Samsung’s campus. JPMorgan estimates the strike could cost Samsung between $14 billion and $20.8 billion in lost operating profit, while sales losses could reach $3 billion. TrendForce warns the walkout could remove up to 4% of global DRAM output from an already supply-constrained market. DRAM prices have surged 90-95% in Q1 2026 alone, and any further disruption could push prices higher for laptops, smartphones, and servers worldwide.

Samsung’s Pyeongtaek facility is central to the company’s expansion of advanced DRAM production, with capacity of around 80,000 wafers per month. The facility also supplies critical components for AI systems built by Tesla, Nvidia, and the world’s largest cloud providers.

The South Korean government has expressed deep concern. Prime Minister Kim Min-seok warned in a national address that the strike could cause up to 100 trillion won ($66.2 billion) in direct and indirect losses and create a domino effect across over 1,700 subcontractors. President Lee Jae-myung stated that basic labor rights could be legally restricted for public welfare, with the government considering invoking emergency mediation power to forcibly halt the strike for 30 days.

The American Chamber of Commerce in Korea warned that the labor uncertainty could affect confidence in Korea’s reputation as a dependable partner in global manufacturing and supply chains.

Talent Drain and Internal Divisions

The strike also exposes deep internal divisions at Samsung. The company’s Device Solutions Division encompasses three businesses — memory chips, system LSI logic chip design, and foundry manufacturing — and the AI boom has made these divisions wildly unequal in profitability. Workers in the foundry division, which has posted billions in losses despite being strategically critical, say they are being left behind.

Some employees have already started leaving. A foundry engineer in Pyeongtaek told Reuters his team has shrunk sharply as colleagues moved to Samsung’s memory division or rival SK Hynix, which abolished its bonus cap last year and now offers payouts approaching $900,000 per employee under bullish forecasts.

Samsung has entered “emergency management mode,” cutting new wafer inputs across production lines and placing lithography equipment on controlled standby. The company said it will not give up on dialogue and continues to engage with the union, but the NSEU says it will not return to negotiations unless management makes significant concessions.

The strike is scheduled to run through June 7, and its outcome could set a precedent for labor relations across South Korea’s technology sector — a bellwether for who wins in the age of artificial intelligence.

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