AI made Samsung a trillionaire, and its employees want part of the fortune

Samsung Electronics has become one of the main beneficiaries of the global boom in artificial intelligence. Rising demand for semiconductors turned South Korea's largest corporation into a company worth $1 trillion this year, boosting Seoul's stock exchange to the sixth largest in the world.

But one segment of the country is dissatisfied with this result: Samsung workers. Tens of thousands of employees have threatened to go on strike, in an unprecedented walkout that could disrupt a crucial supply of memory chips at a time when the AI industry is desperate for more.

Hours before the strike was scheduled to begin on Thursday, workers' unions announced that they had reached a preliminary agreement with management.

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While the deal still needs to be approved by union members, it represents an early victory for Samsung employees, who had been demanding pay increases in light of the company's record profits.

The agreement averted - for now - what would be the largest strike in the company's history, involving more than 48,000 employees, or almost 40% of its workforce in Korea, over 18 days.

The majority of participating employees work in memory chips, essential components in AI hardware produced by technology giants Nvidia and AMD.

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The prospect of a production shutdown has rattled both the South Korean government and the global technology industry. Samsung's revenue accounted for more than 12% of South Korea's GDP last year.

The company is also one of the world's top three memory chip manufacturers at a time of acute shortages, driven by the largest data center expansion in history.

"Any disruption to Samsung's semiconductor production would go far beyond the losses for a single corporate group, leaving deep scars across the entire national economy," South Korean Prime Minister Kim Min-seok said on Sunday.

Samsung workers' preliminary victory comes amid the rise of AI, which threatens to radically transform technology jobs around the world.

On Wednesday, Meta laid off or reassigned nearly 15,000 employees as part of its efforts to devote more resources to AI.

Other companies like LinkedIn, Amazon and Snap have also announced job cuts and restructuring around artificial intelligence this year.

A Bigger Slice of the AI Pie
Last month, Samsung reported record quarterly profits, which soared more than 8.5 times compared with the same period a year ago and surpassed operating profit for the entire year 2025.

Now your workers are seeking a bigger share of the profits.

The unions demanded that Samsung eliminate the bonus cap of 50% of annual salary, set aside 15% of annual operating profit for bonuses, and extend these changes beyond this year.

Although Samsung's chip production employees receive some of the most competitive wages in the country, workers have been mobilized by the difference in bonuses compared to rival chipmaker SK Hynix, South Korea's second-largest company.

SK Hynix also reported record profits this year. But its employees secured a new bonus structure in September that eliminated the cap that limited bonuses to 1,000% of base salary. SK Hynix now allocates 10% of annual operating profit to an employee bonus fund.

Under the new salary structure, some SK Hynix employees are entitled to bonuses equivalent to nearly 3,000% of their base salary in 2025, with the average annual bonus per employee reaching 700 million won (US$465,000).

"The semiconductor industry now faces a war to secure global talent," Samsung's largest union said in a statement last month.

"SK Hynix has already revised its compensation structure to retain talent, while foreign companies are attracting our engineers with exceptional offers."

As part of the preliminary agreement reached with the Samsung union on Wednesday, the company agreed to eliminate the existing bonus cap and allocate 10.5% of business performance profits to bonuses for the company's semiconductor division.

"The agreement arrived later than expected," Samsung said in a statement on Wednesday.

"We will work to build a more mature and constructive labor management relationship, so that such a situation does not happen again."

The dispute has sparked a national debate about wealth distribution, given the huge profits that Samsung and SK Hynix are making.

Jo Geun-jun, head of South Korean labor research and advocacy group Anyoneunion, said the AI boom has created "an extreme form of hyperpolarization."

"On one side of society, the number of workers without job security or labor protections continues to grow," he said. "On the other, permanently employed workers at large conglomerates are enjoying unprecedented bonus payments, driven by soaring corporate profits."

Severe memory shortage
The strike threats have emerged just as the semiconductor supply chain faces exceptional stress.

Global tech giants from Google to Amazon are racing for more cutting-edge AI processors to expand data centers and train next-generation AI models.

Once considered a low-margin commodity, memory chips have become indispensable in AI processors, facilitating high-speed data transfers and storage, said Simon Woo, technology research coordinator for Asia-Pacific at Bank of America. The resulting shortages could persist until 2028, he added.

Research firm SemiAnalysis expects memory chip prices to more than double by the end of this year compared with 2025.

This puts Samsung in a critical position within the global supply chain, as one of the world's three dominant memory chip manufacturers, alongside SK Hynix and US-based Micron Technology.

A long-time player in the semiconductor sector, Samsung was initially slow to capitalize on the AI boom and lagged behind SK Hynix last year as profits fell. But it has since staged a recovery, driven in part by relentless demand for memory chips.

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In the AI memory sector, SK Hynix leads with 57% market share, followed by Samsung's 22% and Micron's 21%, according to Counterpoint data for the fourth quarter of last year.

For now, the interim agreement has boosted Samsung shares, although a strike could still occur if union members vote against the interim agreement.

"In an already memory-constrained environment, an outage at a major memory vendor will certainly only have a negative impact on the AI industry," said Ray Wang, Seoul-based analyst at SemiAnalysis.

"This could further exacerbate shortages and potentially sustain upward momentum in prices in the near term."

Still, a strike is not expected to completely paralyze production. Samsung won a small victory on Monday when a court granted an injunction ruling that workers involved in security operations for chip production must maintain normal staffing levels.

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Source: CNN