Tens of thousands of Samsung workers drawn to a pre-strike rally: chip supplies might be disrupted

Tens of thousands (up to 37,000, per some pre-estimates) of Samsung workers were attending a big rally in South Korea. The reason? Why, they want a compensation reform. Don't we all?

This rally isn't a surprise at all, it was planned months before, as we reported in March.

The new rally was held at Samsung's massive chip factory complex in Pyeongtaek.

A strike is coming?

Per the unionized workers, an effective strike could follow next. This could happen in May if their demands aren't being met.

Before we go on to discuss their list of demands, it's important to highlight how a potential strike could affect the tech world.

If enough workers participate in a strike, they could, in fact, disrupt the chip supplies for multiple companies all over the world, since Samsung is among the biggest players in the chip industry.

Add to this the skyrocketing demand for chips because of the AI boom and you've got a potential global crisis that won't go away in a day or two; instead, its repercussions could be felt for months and years ahead.

Per the report, some experts say that "factory automation" ​and Samsung's "use of subcontractors" would mitigate the impact.

What's with the demands?

Samsung workers protested in 2024 – and since then, union membership has tripled to more ⁠than 90,000. This is over two-thirds of the company's South Korean workforce (a total of 125,000).

They want a better pay system, a fairer one.

Mind you, the AI boom is driving record profit numbers to many tech companies, including Samsung. The RAMpocalypse is bad for end users like you and me, but some firms are bathing in gold.

A key dispute centers on the union's push at Samsung Electronics to remove a cap that limits performance bonuses to 50% of annual base salary, a proposal management has rejected.

The union is also asking for 15% of operating profit to be paid out as bonuses. Plus a 7% increase in base wages… while management has countered with a 10% profit-based bonus plan and extra funding aimed at boosting payouts in the memory division.

Meanwhile, their rival SK Hynix has already removed its bonus cap as part of a pay overhaul, which unions say has widened the compensation gap with Samsung employees.

People have unionized

Choi Seung-ho, who leads the largest labor union at Samsung Electronics, said the rapid rise in union membership reflects strong employee demand for change.

He also noted that many workers have been leaving for rivals like SK Hynix and that companies such as Micron and Tesla are actively recruiting Samsung engineers.

May 21 is coming

Last month, Samsung co-CEO Jun Young-hyun said the company is falling behind competitors on wages due to weak chip earnings but expects the gap to shrink if the semiconductor market recovers.

The company has warned it may take legal action if union activity disrupts critical safety operations.

Ultimately, unions have signaled they could launch an 18-day strike starting May 21 if no agreement is reached.

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