Are Memory Chip Supplies About to Explode? Samsung's Largest Strike in History Is Imminent

As the global chip shortage worsens, labor disputes at South Korea’s Samsung Electronics could add fuel to the “chip crisis.”

According to Samsung’s largest union organization, the “National Samsung Electronics Union (NSEU),” the company is voting on its largest-ever strike plan—if approved this Wednesday, chip production could be halted in May, potentially causing Samsung billions of dollars in losses.

As the world’s largest memory chip manufacturer, a strike at Samsung could significantly impact its semiconductor business and exacerbate global supply bottlenecks, affecting industries from automotive and computers to smartphones.

Samsung’s Largest-Ever Strike Looms

Earlier this month, the NSEU officially launched a ten-day strike vote, with results to be announced this Wednesday.

This vote marks the breakdown of eight months of wage negotiations between Samsung’s union and the company, paving the way for what could be Samsung’s largest strike in history.

Samsung employs about 125,000 people in South Korea, with around 90,000 union members participating in the vote.

Union leader Choi Seung-ho stated that if an agreement isn’t reached, they plan to begin an 18-day strike starting May 2, which could impact about half of the production at Samsung’s semiconductor plant in Pyeongtaek, south of Seoul.

“I expect there will be production disruptions,” Choi Seung-ho said.

Sources in the Korean chip industry indicate that there is indeed a risk of shutdown at Samsung’s memory production lines—once halted, restarting could take up to two months, with losses potentially reaching hundreds of millions of dollars.

A Samsung executive said that even a single strike-induced production halt could damage trust with customers and take years to recover.

The Root Cause: Compensation

The main reason for the strike is dissatisfaction with wages.

Samsung union leaders said that Samsung’s main competitor, SK Hynix, accepted union demands for wage reforms last September, widening the pay gap between Samsung and SK Hynix employees, fueling discontent among Samsung workers.

“The chip industry is booming, but these profits haven’t benefited us—that’s why we’re protesting,” said the union leader.

According to SK Hynix’s latest wage reform plan, the company increased bonus caps and allocated 10% of operating profit to a bonus pool.

The Samsung union states that, under Samsung’s current pay system, a Samsung chip employee (with a base salary of 76 million won, about 350,000 RMB) will receive a performance bonus of 3.8 million won (about 17,500 RMB) in 2025, less than one-third of what SK Hynix employees at the same pay level would earn.

Moreover, given the current booming chip industry, if Samsung’s bonus system remains unchanged, this year’s pay gap will likely widen further.

The union leader said, “If we’re the industry leader, we should receive the same treatment as the leader.”

He also mentioned that besides SK Hynix, Tesla is attracting chip design talent with generous offers. In February, Tesla CEO Elon Musk publicly encouraged Korean chip industry employees to apply for jobs at Tesla, as the company is aggressively entering AI chips for autonomous vehicles and humanoid robots.

“Only by increasing wages can we motivate employees to work harder and improve Samsung’s competitiveness,” he added.

Conflict Between Executives and the Union

Amid the widening pay gap, over the past three months, more than 100 Samsung union members have left the company for competitors.

The union leader hopes Samsung will implement reforms similar to SK Hynix: aiming to raise basic wages by 7%, eliminate bonus caps, and introduce a profit-based bonus pool system.

However, Samsung executives seem reluctant to significantly increase compensation.

Earlier this month, Samsung sent an internal memo stating the company aims to reach a 2026 wage agreement with an “unprecedented” pay plan, including a 6.2% raise and special bonuses for storage chip employees. According to sources, Samsung executives are firmly opposed to removing the bonus cap.

A Samsung spokesperson said, “Because semiconductor profits can fluctuate greatly with market conditions, Samsung will distribute operating profits in a balanced way toward future investments, shareholder returns, and employee compensation.”

Seo Ji-yong, a business management professor at Sangmyung University, commented that Samsung only began introducing union systems in 2020, so the group has long avoided union-related risks, unlike other large Korean conglomerates like Hyundai Motor, which has more experience managing labor relations.

He warned, “If Samsung’s management remains complacent and ignores union demands, these disputes could dampen Samsung’s profit growth momentum.”