Samsung Labor Crisis Leads to 58% Decline in Wafer Production

Samsung's labor union stated that on the evening of April 23, during the night shift, the company's wafer foundry line output dropped by about 58% due to workers attending a rally, and the production of memory chips also declined by about 18%. Samsung refused to comment on the loss of production capacity. The union also warned that if negotiations break down, a large-scale strike lasting 18 days will be launched from May 21st.

According to reports, about 30,000 to 40,000 people gathered outside Samsung's Pyeongtaek semiconductor base to participate in the rally. The union demands that the company distribute 15% of its annual operating profit as bonuses to employees in the chip department, totaling more than 40 trillion won (approximately $27 billion), which calculates to an average of over $400,000 per worker. A Samsung spokesperson stated that the company will continue to work hard to reach an agreement on wage negotiations as soon as possible.

The deeper background of this work stoppage risk is the explosive expansion of Samsung's performance—the company is expected to see a year-on-year increase of about 700% in operating profit in the first quarter of 2026, and analysts even predict that it is likely to surpass NVIDIA by 2027, becoming the world's most profitable enterprise. The gap between profit and compensation has become the core tension in this labor-capital confrontation.

Union Demands and Management Position

Samsung's largest union demands that the company allocate 15% of its annual operating profit to the bonus pool for employees in the chip department. According to reports, this proportion corresponds to an amount exceeding 40 trillion won (about $27 billion), with each worker receiving an average of over $400,000 after conversion. The union also calls for a 7% wage increase.

Samsung's management currently proposes a plan that uses 10% of operating profit for bonuses, with an additional 6.2% wage increase, as well as a package of benefits including preferential mortgage loan support. The aforementioned plan has been rejected by the union.

Choi Seung-ho, the head of Samsung's largest union, said at the rally site:

"The company talks about crises every year, but during those crises, it is not the management that supports Samsung Electronics, but the workers—it is the union members who make the products, improve the processes, fight all night, and increase the yield, making the company a leading global semiconductor manufacturer."

The union uses the distribution plan of rival SK Hynix as a reference. According to reports, SK Hynix has agreed to allocate 10% of its annual operating profit to the performance bonus pool last year.

The production shutdown effect produced by this rally has clearly indicated the potential impact scale of a comprehensive strike. A single rally has led to a single-shift output decrease of about 58% in the wafer foundry line and about 18% in the production of memory chips—among which the wafer foundry line is particularly affected due to its higher labor intensity.

In contrast, the last strike launched by Samsung's union in 2025 only lasted three days and had a relatively controllable impact on production. The 18-day strike threatened by the union—lasting from May 21st to June 7th—if implemented, will far exceed the past in terms of scale and duration, and the impact on Samsung's supply chain is incalculable.

Strong Performance Empowers Union Negotiations

The key background to the intensification of the labor-capital conflict is Samsung's explosive growth in performance. In recent years, Samsung, along with SK Hynix and Micron, has accelerated its shift to the production of high-bandwidth memory (HBM) used in NVIDIA AI accelerators, and has been the first to commercially ship the next-generation HBM4 to customers this year. The company is expected to achieve a total sales volume of 133 trillion won (about $88.2 billion) in the first quarter of 2026, significantly higher than the market consensus expectation of 116.81 trillion won; the operating profit is predicted to be about 57.2 trillion won (about $37.8 billion), with a year