Over 45,000 workers are threatening an 18-day strike starting May 21, the largest in Samsung's history. The strike would disrupt production of memory chips crucial for AI data centers, smartphones, and laptops.
Samsung Electronics has reaped huge profits from a global memory shortage. The company is offering generous bonuses but wants to give memory chip employees at least six times more than workers in its logic chip design and manufacturing businesses.
The union argues that other 23,000 workers - who make AI chips for Tesla and Nvidia - should not be left behind, even though their division has suffered billions in losses.
Reuters reviewed hundreds of pages of wage negotiation transcripts and spoke with over 10 workers. They revealed deep divisions and employee departures that threaten Samsung's goal to be a one-stop semiconductor shop.
JPMorgan estimates the strike could reduce Samsung's operating profit by up to 31 trillion won ($20.79 billion) and sales by 4.5 trillion won.
Worker discontent grew after rival SK Hynix abolished its pay cap, luring some Samsung employees away. Samsung proposes memory workers get bonuses up to 607% of annual salary, while logic chip workers get only 50-100%.
The union demands abolishing the bonus cap and allocating 15% of annual operating profit to a bonus pool. Samsung says bonuses should be based on merit.
If the strike proceeds, it could affect Samsung, the South Korean economy, and global supply chains. The American Chamber of Commerce in Korea warned of damage to Korea's reputation as a reliable manufacturing partner.
