Samsung accounts for about a third of global DRAM production — the memory used in virtually every cell phone, laptop, server and data center on the planet. Along with South Korean rival SK Hynix, it controls roughly two-thirds of the global DRAM market and an even larger share of high-bandwidth memory (HBM), the specialized chips without which artificial intelligence systems cannot function. Samsung and SK Hynix are two of only three companies producing HBM in the world; the third is the American Micron.
When talking about AI infrastructure, the focus usually falls on Nvidia’s GPUs. But those GPUs are useless without the memory chips stacked alongside them, and Samsung’s three manufacturing complexes in South Korea are among the most important assets of the current AI industrial boom. Samsung operates 12 manufacturing lines, employs more than 260,000 people globally and plans to invest US$73 billion in capex and semiconductor R&D this year alone — the largest annual investment in chips ever made by a single company in history.
So the system should feel a shock when, on May 21, around 45,000 unionized Samsung workers plan to lock their arms for 18 days. If this comes to fruition, it would be the largest outage in the history of the semiconductor industry, precisely at the most critical bottleneck in the AI supply chain. Unlike previous labor disputes, this time AI “hyperscalers” are unlikely to be able to easily absorb a supply disruption.
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A greve
Last September, SK Hynix reached an agreement with its union to allocate 10% of annual operating profit directly to employees as a performance bonus for the next ten years, in addition to removing caps on bonuses. Based on profit projections for 2026, this equates to average payments of US$460,000 to US$477,000 per worker this year, considering SK Hynix’s 35,000 employees, with estimates approaching US$900,000 per person next year. It’s not something entirely new for the company: in February, it had already paid profit-sharing bonuses that, on average, reached around US$95,000 per employee.
Now, Samsung unions are calling for 15% of operating profit to be allocated to a bonus fund, the removal of the current cap that limits bonuses to 50% of base salary and a 7% salary adjustment. Management responded with an offer of around 13% of operating profit, but only as a one-off payment for 2026, with no commitment to permanent structural changes.
Competitive pressure has already become a problem for Samsung’s talent retention. According to union president Choi Seung-ho, around 200 Samsung employees have left the company to work at SK Hynix in the last four months. In 2024, Samsung did not pay performance bonuses as the chip division recorded operating losses during the memory market downturn. And while the recovery has been impressive—with operating profit for the first quarter of 2026 increasing nearly eightfold to a record—workers have not received any of that gain.
After a 17-hour negotiating session at the National Labor Relations Commission (NLRC) on May 13 ended without agreement, the body struggled to find a compromise. The commission even proposed around 40 trillion won (US$26.7 billion) in total bonuses, a proposal rejected by the union. Samsung then sent a letter proposing further direct dialogue, and the union accepted on the condition that co-CEO Jun Young-hyun personally presented concrete proposals on key points. So far, there has been no agreement.
In April, a one-day strike anticipated what a prolonged strike could provoke. According to reports, foundry production fell 58% and memory manufacturing fell 18% during the affected shift. Samsung estimates that there could be a complete strike over the planned 18 days of strike, with the participation of almost 45 thousand union members. In a hypothesis of this type, industry estimates point to potential losses of between 30 trillion and 100 trillion won. The company has already initiated “warm-down” procedures, reducing the input of wafers, as stopping chip manufacturing in the middle of the process involves discarding wafers that cost US$20,000 each.
What’s at stake
A strike could slow down Samsung just as it is trying to regain ground against its rival. For the first time in 33 years, SK Hynix surpassed Samsung as the world’s largest DRAM maker in the first quarter of last year, driven almost entirely by its dominance in HBM for AI applications. In the following quarter, SK Hynix held 62% of the global HBM market, while Samsung fell to 17%, behind even Micron, with 21%. Samsung’s HBM3E chips struggled to pass Nvidia’s qualification criteria for much of 2025, a period in which SK Hynix and Micron nabbed the most lucrative global contracts.
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At the end of 2025, Samsung regained leadership in DRAM market share as a whole, after starting to supply HBM to Nvidia and expanding the production of “legacy” memories. Its HBM4 chips, whose mass production began in February, have reportedly exceeded initial expectations, and all HBM4 production for 2026 has already been sold. A prolonged strike, however, could put this recovery trajectory at risk.
Samsung President Shin Je-yoon said he was “concerned about the loss of market leadership due to customer flight and a drop in competitiveness” in the event of a strike. JPMorgan analyst Jay Kwon estimated that, if Samsung fully meets the union’s demands, 2026 operating profit could be negatively impacted by 7% to 12% just due to increased labor costs. Adding more than 4 trillion won in lost revenue with 18 days of reduced production, the total effect on operating profit would be in the range of 2.1 trillion to 3.5 trillion won in the bank’s base scenario, with much worse results if the strike extends or if the recovery is slow.
The memory market is tight, and one of the best examples of this was the negotiation between Samsung and Apple earlier this year. According to the Korean vehicle Dealsite, Apple held emergency meetings with Samsung’s semiconductor division to guarantee memory supplies for the production of the iPhone 17. Samsung planned to ask for a 60% price adjustment. Instead, as a negotiating tactic, he opened with a demand of 100% — double — and Apple immediately accepted.
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A “dividend” for citizens
On May 12, Presidential policy chief Kim Yong-beom posted on Facebook that South Korea should pay citizens a “dividend” from the AI boom, arguing that the gains were built on an industrial base accumulated across the nation over half a century. He explicitly compared the idea to the Alaska Permanent Fund, which distributes part of its oil revenues to residents.
On the same day, the Seoul Stock Exchange composite index (KOSPI) fell 5.1% intraday, erasing more than US$300 billion in market value, as investors initially interpreted the speech as a new tax regime aimed at Samsung and SK Hynix — which together account for almost half of the index’s total market value. Kim was quick to clarify that he was referring to the redistribution of “surplus” tax revenues already generated by the boom, not the creation of new taxes. The Presidency stressed that the statements reflected Kim’s personal opinion, not official government policy.
Foreign investors sold 5.6 trillion won worth of KOSPI shares on the day of the “dividend” declarations to citizens. Korean retail investors took advantage of the drop and bought 6.7 trillion won. The KOSPI, which had momentarily touched 7,400 points, reversed direction and closed the following day at an all-time high above 7,800.
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Together, Samsung and SK Hynix are expected to record about 500 trillion won in combined operating profit in 2026, and their corporate income tax bill alone could exceed 100 trillion won.
2026 Fortune Media IP Limited
