When people talk about AI infrastructure, they tend to focus on Nvidia’s GPUs. But those GPUs are useless without the memory chips stacked alongside them, and Samsung’s three fabrication complexes in South Korea are among the most important pieces of the AI industrial boom. Samsung operates 12 fabrication lines, employs over 260,000 people worldwide, and is investing $73 billion in semiconductor capex and R&D this year alone, the largest single-year chip investment by any company in history.

That’s why it’ll be a shock to the system when on May 21, nearly 45,000 of Samsung’s unionized workers plan to walk off the job for 18 days. If that happens, it will be the largest work stoppage in the history of the semiconductor industry, at the single most important chokepoint in the AI supply chain. But unlike past labor disputes, AI hyperscalers won’t be able to absorb a supply disruption.

The strike

Last September, SK Hynix settled with its own union to allocate 10% of annual operating profit directly to employees as performance bonuses for the next decade, while removing caps on bonuses. Based on 2026 profit forecasts, that translates to average payouts of $460,000-$477,000 per worker this year across SK Hynix’s 35,000 staff, with projections approaching $900,000 per person next year. This is nothing new for SK Hynix: it already paid profit-sharing bonuses averaging about $95,000 per employee this past February.

Now, Samsung’s unions are requesting 15% of operating profit be allocated to a bonus pool, removal of the current cap that limits bonuses to 50% of base salary, and a 7% wage hike. Management countered with roughly 13% of operating profit, but only as a one-time payment for 2026, and didn’t commit to permanent structural changes.

The competitive pressure has already become an issue for Samsung’s talent. Union chairman Choi Seung-ho said roughly 200 Samsung employees have left for SK Hynix over the past four months. In 2024, Samsung paid no performance bonuses at all after the chip unit posted operating losses throughout the memory downturn. And while the turnaround has been staggering, with Q1 2026 operating profit increasing nearly eightfold to a record, the workers received none of the payout.

After a 17-hour negotiation session at the National Labor Relations Commission on May 13 failed to produce a deal, the NLRC struggled to find a compromise. The commission initially proposed roughly 40 trillion won ($26.7 billion) in total bonus payouts, which the union rejected. Samsung then sent a letter proposing further direct dialogue, and the union accepted only if co-CEO Jun Young-hyun personally presents concrete proposals on key issues. No deal has been reached yet.

In April, a one-day labor walkout forecasted what an extended strike could do. Foundry output reportedly dropped 58% and memory fabrication fell 18% during that affected shift. Samsung believes a full shutdown could occur for the strike’s planned 18-day span with nearly 45,000 union members expected to participate. Should such a thing happen, industry estimates put potential losses at 30 trillion-100 trillion won. Samsung has begun “warm-down” procedures, scaling back wafer inputs, as halting chip fabrication mid-process means scrapping wafers that cost $20,000 each.

The stakes

A strike would slow down Samsung while it plays catch-up with its rival. For the first time in 33 years, SK Hynix overtook Samsung as the world’s largest DRAM maker in Q1 last year, driven almost entirely by its dominance in HBM for AI. The next quarter, SK Hynix held 62% of the global HBM market as Samsung slipped to 17%, behind even Micron at 21%. Samsung’s HBM3E chips struggled to pass Nvidia’s qualification standards for much of 2025, while SK Hynix and Micron captured the premium global contracts.

By the end of 2025, Samsung reclaimed the overall DRAM market share lead after shipping HBM to Nvidia and expanding legacy memory production. Its HBM4 chips, which began mass production in February, have reportedly outperformed early expectations, and the entire 2026 HBM4 production run is already sold out. But a prolonged strike could put that turnaround trajectory at risk.

Samsung Chairman Shin Je-yoon said he was “worried about losing market leadership amid fleeing customers and falling competitiveness” in the event of a strike. JPMorgan analyst Jay Kwon has estimated that if Samsung meets the union’s demands in full, 2026 operating profit faces a 7%-12% downside from increased labor costs alone. Add more than 4 trillion won in lost revenue from 18 days of reduced production, and the total operating profit impact lands at roughly 2.1 trillion-3.5 trillion won in JPMorgan’s base case, with considerably worse outcomes if the strike expands or recovery is slow.

The memory market has become tight, and the best illustration was none other than Samsung’s negotiations with Apple earlier this year. According to Korean outlet Dealsite, Apple held emergency meetings with Samsung’s semiconductor division to lock down memory for iPhone 17 production. Samsung reportedly planned to push for a 60% price increase. Instead, as a negotiating tactic, it opened with a demand for 100%, a full doubling, and Apple accepted immediately.

A citizen’s dividend

On May 12, presidential policy chief Kim Yong-beom posted on Facebook that South Korea should pay its citizens a “dividend” from the AI boom, arguing that the gains were built on an industrial foundation the entire nation accumulated over half a century. He explicitly compared it to Alaska’s Permanent Fund, where oil revenues are distributed to residents.

That day, the Korea Composite Stock Price Index (KOSPI) fell as much as 5.1% intraday, shedding more than $300 billion in value as investors initially interpreted it as a tax regime aimed at Samsung and SK Hynix—which together account for nearly half the index’s total market cap. Kim quickly clarified that he was talking about redistributing excess tax revenue already generated by the boom, not imposing new levies. The presidential office confirmed the remarks were Kim’s personal opinion, not government policy.

Foreign funds dumped 5.6 trillion won in KOSPI shares on the day of Kim’s citizen dividend comments. But Korean retail investors flooded in, buying 6.7 trillion won. The KOSPI, which had briefly touched 7,400, reversed course and closed at a record high above 7,800 by the next day.

Samsung and SK Hynix together are projected to post around 500 trillion won in combined operating profit in 2026, and their corporate tax bill alone could exceed 100 trillion won.