Riding the AI-driven demand for high-bandwidth memory (HBM), Samsung Electronics' first-quarter net profit surged nearly sixfold. Now, two major unions are demanding the company hand over 15% of each division's operating profit to employees, plus a 7% raise. If management doesn't cave, the unions are threatening an 18-day strike starting May 21.
The immediate spark? Rival SK Hynix's jaw-dropping dividend. Hynix has pledged to set aside 10% of operating profit annually for the next decade — which, based on this year's earnings, would mean an average of $475,000 per employee (about 700 million won). By contrast, Samsung's mid-level managers got roughly 45 million won in year-end bonuses. That tenfold gap lit a fire under employees: nearly 40,000 workers rallied outside the Pyeongtaek chip plant in late April. According to Bloomberg, if Samsung matched the union's 15% demand, the per-employee bonus would also top $400,000, essentially closing the gap with Hynix.
Negotiations are stalled. Insiders say Samsung management has upped its offer from 10% to roughly 13% of operating profit, but the union is refusing a one-time payout — they want the profit-sharing formula written into company policy permanently. If the strike goes ahead, it could cost Samsung over 10 trillion won in direct losses and seriously damage its credibility as a contract manufacturer for Nvidia's next-generation HBM4 chips.
But the fight has also split Samsung workers. Because the company still has lower-margin divisions like home appliances and phones, a division-by-division 15% payout would funnel nearly all the money to the chip division. To avoid making internal pay inequality even worse, a smaller union representing appliance and phone workers withdrew from the joint strike on Monday.