Samsung workers rally, call for larger share of AI profits

About 40,000 Samsung Electronics workers rallied on Thursday, demanding a larger share of the company's booming profits.  

Unions warned they could launch an 18-day strike if their demands are not met, potentially disrupting the production of chips necessary to feed the growing AI industry.

The South Korean giant said it would continue efforts to reach a swift agreement in ongoing wage negotiations. 

What are Samsung unions demands?

Samsung unions said the company failed to offer an adequate pay package despite its strong performance. Samsung's shares have surged nearly 300% over the past year, driven by demand for AI chips.

The unions want Samsung to remove the cap on bonus pay, among other demands. The cap is currently set at 50% of the annual base salary.

The unions say that a chip division employee earning 76 million won ($51,000, €44,000) would receive a 2025 bonus of 38 million won ($26,000, € 22,000). This is less than a third of what a worker in a similar role at rival company SK Hynix would receive. Last September, SK Hynix agreed to scrap its bonus cap.

SK Hynix is the direct rival of Samsung Electronics. The two South Korean companies produce together about two-thirds of the world's memory chips. 

SK Hynix overtook Samsung to become Nvidia's main supplier of high-bandwidth memory (HBM) chips following the launch of ChatGPT in 2022. 

Strikes threaten AI chips supply

Samsung has rejected union demands to remove the bonus cap but says it will offer additional funding so memory division workers, who develop memory chips, earn more than competitors this year.

If talks fail, unions plan an 18-day strike starting May 21. They say a halt of production could cost the company more than 1 trillion won ($700 million, €600 million) per day.

Even a short disruption could damage customer trust and take years to recover from, Samsung officials say.

Chipmakers have benefited from the AI boom, but the Middle East conflict has raised concerns about supply chains. The crisis has restricted access to key materials such as helium and pushed up energy costs.

Samsung, long known for resisting unions, saw its first-ever worker strike in 2024..

Edited by: Alex Berry