Tens of thousands of workers at Samsung Electronics staged a large rally on Thursday at a vast factory complex located south of Seoul, expressing anger over compensation levels and escalating tensions ahead of a planned extended strike that could disrupt artificial intelligence chip production.

According to union organisers, around 40,000 people participated in the protest, marking the largest demonstration ever held at Samsung, News.Az reports, citing Reuters.

The company has long been associated with strong union-busting practices, although workers carried out their first walkout in 2024.

If their demands are not met, the union plans to launch an 18-day strike beginning on May 21. Such industrial action could delay deliveries to customers, increase chip prices further, and potentially benefit rival companies.

A key issue raised by workers is what they describe as a significant disparity in bonus payments compared to crosstown competitor SK Hynix. SK Hynix was the first to supply high bandwidth memory for artificial intelligence chip systems used by Nvidia and other clients following the launch of ChatGPT in late 2022.

At the same time, the artificial intelligence boom has also contributed to Samsung reporting record-level profits.

“In reality, many employees are leaving for SK Hynix,” said Song Yong-gi, 39, who works in logistics for an assembly line in Samsung’s chip division.

“At the end of the day, more than 90% of employees work for pay, and the compensation gap has become so wide that it’s driving these moves,” Song added.

Other Samsung employees participating in the mass sit-in at the Pyeongtaek campus, dressed in black vests, also stated that a number of colleagues had already moved to SK Hynix.

The Samsung Electronics Labour Union claims that a chip division employee with a base salary of 76 million won would receive around 38 million won in bonus pay in 2025, which is less than one-third of what a similarly paid employee at SK Hynix would receive.

Samsung, for its part, stated that it would continue working toward reaching a swift agreement in ongoing wage negotiations.

A Samsung official, speaking anonymously, warned that production disruptions caused by even a single strike could harm customer trust and take years to recover from.

In September, SK Hynix accepted union demands for compensation reforms and substantial bonuses, which intensified frustration among Samsung employees over the wage gap and led to a sharp increase in union membership.

Union membership has now exceeded 90,000 workers, representing more than 70% of Samsung’s workforce in South Korea.

One of the most controversial issues is the union’s demand to remove the current cap on bonus payments, which is set at 50% of annual base salary. Management has rejected this proposal. According to union officials, SK Hynix has already agreed to abolish its bonus cap.

The Samsung union is also calling for 15% of annual operating profit to be allocated to bonus payments, along with a 7% increase in base salaries.

However, management has proposed allocating 10% of operating profit for performance-based pay and has additionally offered extra funding to ensure that memory division employees receive higher payouts than competitors this year.

News.Az 

By Nijat Babayev