Key Points:
- Samsung unions expect roughly 37,000 workers to attend a rally at the Pyeongtaek chip factory.
- Union membership recently surged to 90,000, accounting for over 70% of Samsung’s South Korean workforce.
- Workers demand a 7% salary increase and want 15% of operating profits allocated to performance pay.
- Unions plan an 18-day strike starting May 21 if management refuses to meet their compensation demands.
Samsung Electronics unions expect around 37,000 workers to gather for a massive rally in South Korea this Thursday. The workers will meet at the giant Pyeongtaek chip factory complex. This gathering happens right before a potential strike next month. If the strike happens, it could easily disrupt global computer chip supplies just as customer demand for artificial intelligence explodes.
For a long time, Samsung completely avoided worker unrest. The company even had a well-known reputation for actively breaking up unions. Things changed fast in 2024 when workers walked off the job for the very first time. Since that moment, union membership has rapidly exploded. The union now boasts more than 90,000 members. This massive number makes up over 70% of Samsung’s 125,000 employees in South Korea.
Workers feel incredibly angry about their pay, especially when they compare it to their competitors’. The recent artificial intelligence boom has helped chip companies make record profits. Just across town, rival SK Hynix gave its workers major compensation reforms and huge bonuses last September. SK Hynix also expects its first-quarter operating profit to jump five times higher this Thursday. This massive financial success at SK Hynix highlighted a painful pay gap for Samsung employees and pushed thousands to join the union.
Choi Seung-ho leads the largest union at Samsung. He recently explained that the huge jump in membership shows how much employees want immediate change. He also pointed out a growing problem with staff leaving the company. Many experienced Samsung workers have already quit to join SK Hynix. Other major technology companies, including Micron and Tesla, are also actively recruiting Samsung engineers. Samsung keeps its exact employee turnover numbers a secret, but the brain drain worries workers.
Samsung leaders know they have a major problem on their hands. In March, Co-CEO Jun Young-hyun admitted that the company had fallen behind its rivals in wage competitiveness. He blamed this issue on slow chip earnings in the past few years. However, he promised workers that the pay gap would shrink as the global chip market recovers.
The union brought very specific financial demands to the table. Right now, Samsung caps performance pay at 50% of a worker’s annual base salary. The union wants the company to scrap this limit completely. On top of that, workers want Samsung to hand over 15% of its annual operating profit to fund their performance pay. They also demand a straight 7% increase in their basic salaries.
Samsung management rejected the union’s primary demands and offered a different deal. The company proposed using 10% of operating profit for performance pay, rather than the requested 15%. Management also promised additional funding to ensure memory division employees receive higher payouts than their competitors this year.
The two sides have very little time left to reach an agreement. If they fail to reach a deal, the unions plan to launch an 18-day strike starting on May 21. Business experts warn that a strike of this size could delay product shipments to major buyers and push global chip prices even higher. However, some analysts think Samsung’s heavy reliance on factory automation and external subcontractors might help the company survive the strike without shutting down completely.
Right now, nobody knows exactly how many people will actually show up to the rally on Thursday. Samsung warned workers that it will take strict legal action if the rally disrupts critical safety facilities. Those specific safety facilities require more than 2,000 workers to remain operational. Meanwhile, excitement on the ground keeps growing. One union member in the IT support group reported receiving endless requests from coworkers who desperately want union vests for the upcoming event.
