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According to labor and industry reports, the strike risk at Samsung Electronics is escalating as tensions grow between management and its labor union over profit-sharing and wage policies.

The labor union is demanding that Samsung allocate 15% of operating profit from each business division to employees and raise base salaries by 7%. If the demands are not met, union members plan to begin an 18-day strike starting May 21. The situation has raised concerns over potential disruptions in one of the world’s largest semiconductor and electronics supply chains.

Kwon Seok-joon, a professor at Sungkyunkwan University, estimates that an 18-day strike could result in direct losses of 10 trillion to 17 trillion Korean won (approximately US$6.8 billion to US$11.6 billion) for Samsung Electronics, with additional indirect losses potentially increasing the overall impact.

In response to ongoing negotiations, Samsung management has reportedly agreed in principle to introduce a structured bonus system as a three-year pilot program before potential full implementation. Earlier discussions had already considered allocating around 13% of operating profit as employee bonuses, but formalizing this policy has faced internal resistance.

Despite these concessions, labor representatives argue that Samsung’s compensation remains less competitive compared to rival SK Hynix. They claim that the current proposal could be a strategy to divide union members and have urged employees to proceed with the planned strike.

The dispute comes at a time when the memory semiconductor industry is experiencing unprecedented demand driven by artificial intelligence applications. Strong AI-related chip orders have significantly boosted both Samsung Electronics and SK Hynix stock performance, with both companies recently reaching record-high share prices.

While profitability has surged across the sector, compensation structures differ significantly. SK Hynix reportedly allocates around 10% of operating profit to employee bonuses, whereas Samsung has traditionally maintained a fixed bonus system rather than a profit-linked model.

A former Samsung employee noted that mid-level engineers at Samsung may earn an annual salary of around 90 million won with bonuses of approximately 45 million won, while at SK Hynix, total bonuses can reach 250 million to 300 million won.

According to estimates from Meritz Securities, SK Hynix’s operating profit could reach 250 trillion won this year. If 10% of that profit were distributed among approximately 35,000 employees, the average payout could be around 70 million won (about US$47,500) per employee.