Review Samsung‘s Strike: Will Memory Chips Rally?

01 The complete account of the Samsung Electronics strike

Samsung Electronics' largest-ever strike stems from a core issue: how to distribute record-high profits generated in the AI era among employees.

In the first quarter of 2026, Samsung's operating profit soared 756% year-on-year to 57.2 trillion won, with the semiconductor business accounting for 93% of the total. Nevertheless, the existing policy caps employees' performance bonuses at 50% of their annual salary. In contrast, rival SK Hynix scrapped the bonus cap last September and allocated 10% of annual operating profit entirely to the performance bonus pool, widening the pay gap sharply between staff of the two firms.

Reports previously stated that Samsung semiconductor employees with an annual base salary of 76 million won only received 38 million won in bonuses for 2025, less than one-third of the bonus income of counterparts at SK Hynix with equivalent salaries.

Salary negotiations officially kicked off between labor and management of Samsung Electronics on December 16, 2025.

In February 2026, the union initially demanded that 20% of operating profits be paid out as performance bonuses. The two sides failed to reach an agreement, and the negotiations broke down on February 19. The union immediately applied for mediation with the Central Labor Committee. Mediation also failed in early March, entitling the union to hold legal strikes.

A referendum on the strike was conducted among more than 66,000 union members from March 9 to 18. The proposal was approved with a support rate of 93.1%. The union officially announced its first full-scale strike in two years, to be held from May 21 to June 7.

There was a brief glimmer of hope midway. The union held an emergency meeting with Jeon Young-hyun, Vice President and head of the Device Solutions Division, on March 23, and negotiations resumed the following day. Talks stalled again on March 30. Management proposed a one-time special compensation if the division claimed the top position in the domestic industry, while the union insisted on establishing a permanent institutional mechanism, leaving the two sides unable to bridge their differences.

On April 23, around 40,000 Samsung Electronics workers staged a rally at the Pyeongtaek factory complex south of Seoul, marking the company's largest labor demonstration to date. The union reiterated that an 18-day strike would be launched starting May 21 if its demands were not met. An anonymous Samsung executive stated that production halts caused by even a single strike could erode customer confidence, which would take years to rebuild.

Tensions escalated sharply in May. With active coordination from the Ministry of Employment and Labor, labor and management agreed to resume remedial mediation on May 8.

The first round of mediation held from May 11 to 13 ended in failure. The union chairman commented that the proposal failed to make performance bonuses transparent and retained the existing 50% bonus cap, representing a step backward.

In the following days, Samsung Electronics Chairman Lee Jae-yong issued a public apology to global clients and local citizens. Senior executives visited the union at the Pyeongtaek plant, and management replaced the chief negotiator as requested by the union.

On May 16, labor and management of Samsung Electronics announced that the second follow-up negotiation would be held at the Central Labor Committee in Sejong Government Complex on the morning of May 18.

On May 18, the court approved part of the injunction filed by Samsung, requiring 7,087 essential employees to remain on duty during the strike. The union will be fined 100 million won per day for violations.

The second round of remedial mediation lasted from May 18 to 20, running through midnight over three days.

On May 20, the union stated that labor talks had collapsed as Samsung management rejected the mediation proposal. A general strike would proceed as scheduled the next day on May 21. It also remarked that negotiations would not cease amid the strike, and efforts would continue to reach an agreement.

The core disputes between the two sides are as follows. The union demands the abolition of the 50% annual salary bonus cap, the allocation of 15% of annual operating profit to the bonus pool, and the permanent inclusion of such revisions in formal agreements. Samsung management offered one-off bonuses for memory chip staff exceeding those paid by SK Hynix this year, yet refused to scrap the existing bonus cap or formalize any long-term settlement terms.

02 Potential Impacts

Based on various current reports, the strike will exert impacts mainly in the following aspects.

First comes the influence on production capacity and supply chain.

As the world's top memory chip maker, Samsung Electronics holds around 40% of the DRAM market and 30% of the NAND flash memory market. Repercussions emerged even before the official strike kickoff. Following the breakdown of negotiations on May 13, Samsung launched preparatory work for gradual production suspension, curbed new wafer input at the front-end process, and restructured product portfolio focusing on high-value products such as HBM to minimize losses.

JPMorgan estimates that an 18-day strike will cut annual DRAM output by 0.9%, NAND production by 0.5% and foundry capacity by 2.4%. Though the figures seem modest, the DRAM market is already tight with only six chips deliverable out of ten ordered. Industry insiders note that a 0.9% output drop is enough to trigger market panic. Interruption of routine semiconductor equipment maintenance will also entail lengthy recovery periods. Thousands of Samsung suppliers and surrounding businesses will inevitably suffer spillover effects.

Second, the strike will affect Samsung's business performance and internal cohesion.

According to various estimates, the direct and indirect losses from the 18-day strike span a wide range — JPMorgan Chase estimates the impact on full-year operating profit at between 21 trillion and 31 trillion Korean won, while the union's own estimate puts it as high as 30 trillion won.

As revealed by internal employees, a large number of workers applied for annual leave during the strike, responses to work-related emails slowed noticeably, and signs of organizational slack began to emerge. Meanwhile, employees in the DX division (home appliances, mobile phones, TVs) feel that the union has focused exclusively on semiconductor performance bonus struggles while ignoring their own demands. Thousands of members have gradually left the union, and the trend of internal division is becoming increasingly apparent.

Furthermore, there is the impact on the South Korean economy and financial markets. A report from the Bank of Korea shows that in the worst-case scenario, the country's economic growth rate could fall by 0.5 percentage points this year. Notably, semiconductors currently account for 37% of South Korea's total exports, a significant increase from 20% in the same period last year. Should production capacity remain under sustained pressure, the drag on overall export figures will be difficult to avoid.

On the capital markets front, some union members have posted激进 slogans (literally "radical slogans" or "militant slogans") on Telegram groups, such as "Let's shake the KOSPI," adding further uncertainty to expectations about the actual intensity of the general strike. Anxiety continues to spread across the industry.

According to Adata Chairman Chen Li-bai, a strike at Samsung appears unavoidable and will impact memory output, though the effect on the full year should be limited. Driven by psychological effects, it could push up DRAM and NAND Flash prices.

Looking at the spot chip market: in February and March of last year, prices for DDR4 began to rise following news that the three major manufacturers would halt DDR4 production. In June, Micron officially announced it would end DDR4 production, and the market exploded. In early October, OpenAI announced a strategic partnership with Samsung and SK Hynix, triggering another surge in the spot market after the National Day holiday. In November, the three major players changed their contract price framework from quarterly to monthly, and the uptrend continued to strengthen. From late December to early January, the memory market saw a short burst of demand, with both NAND Flash and NOR Flash recording notable spikes during this period.

After the Lunar New Year holiday, DDR4 prices initially moved sideways, then began to decline after a short period. Starting in late March, amid news of "DDR5 price collapses" and "market meltdowns," prices for DDR4 and memory modules trended downward, and the market entered a sluggish phase. After the Labour Day holiday, the market gradually recovered.

Recently, driven by factors such as a strike at Samsung, price increases from some manufacturers, and major traders replenishing inventory, the market has accelerated its recovery. In the past week, prices for DDR3, DDR4, Flash, and eMMC products have risen to varying degrees. The impact of the Samsung strike will require continued monitoring.