Samsung Electronics’ largest union has put a planned strike on hold after reaching a tentative pay deal with the South Korean tech giant, temporarily easing fears of disruption at the world’s biggest memory chipmaker during a boom in artificial intelligence (AI) data‑centre construction.
The union, representing nearly 48,000 workers, said industrial action scheduled to begin Thursday would be suspended while members vote on the agreement between 22 and 27 May, BBC reports.
At the heart of the dispute is how to share profits from surging demand for AI memory chips. Samsung had planned to award generous bonuses to 27,000 staff in its memory chip division — at least six times higher than those offered to employees in other units.
The union argued that 23,000 workers producing less advanced chips for clients such as Tesla and Nvidia should not be excluded.
Concerns were raised that a strike could disrupt chip production, with major consequences for global supply chains and South Korea’s export‑driven economy.
Samsung is the world’s largest memory chipmaker by sales, supplying chips for AI data centres, smartphones and laptops. The broader Samsung Group accounts for about one‑fifth of South Korea’s economic output.
What has Samsung’s said?
Samsung reported a 750 per cent year‑on‑year jump in operating profit in the first quarter, driven by booming AI chip demand.
Its market valuation passed $1 trillion in May. Rival SK Hynix scrapped its bonus cap last year, leading to payouts more than three times higher than Samsung’s, and prompting some Samsung staff to defect.
In wage talks, Samsung proposed bonuses of 607 per cent of annual salary for memory chip workers — higher than SK Hynix — but only 50 per cent to 100 per cent for employees in other divisions.
The union demanded abolition of Samsung’s 50 per cent bonus cap and allocation of 15 per cent of annual operating profit to a bonus pool for all workers.
After the tentative deal, Samsung said, “With a humble attitude, we will build a more mature and constructive labour‑management relationship to ensure that such an incident never happens again.”
Shares rose more than 6 per cent on Thursday, while South Korea’s Kospi index jumped over 7 per cent.
Potential impact of a strike
Analysts at JP Morgan estimated a strike could hit Samsung’s operating profit by 21 trillion to 31 trillion won ($14bn–$20.8bn).
However, any walkout is likely to be limited after a South Korean court granted Samsung an injunction requiring staffing levels for safety, facility protection and product quality to remain normal.
The court also barred the union from occupying or locking company facilities, warning of fines of $74,000 per day for violations.
The American Chamber of Commerce in Korea cautioned that disruptions in strategically important industries could ripple across global markets, with competing regional manufacturers poised to benefit if concerns over predictability persist.
