The Samsung booth at the World IT Show in Seoul, South Korea.Image: keystone
May 20, 2026, 10:24 amMay 20, 2026, 10:26 am
At Samsung Electronics, the world’s largest semiconductor producer, around 48,000 unionized employees have threatened an 18-day general strike. The strike planned for Thursday would be by far the largest in the company’s history.
The background is a conflict over the amount of bonus payments to employees after the South Korean electronics giant achieved record profits as part of an ongoing boom in artificial intelligence.
How should the profits be distributed fairly?
What are the union’s demands? The central point of contention is the amount of annual bonuses for Samsung employees in the semiconductor department. The union is demanding that 15 percent of the company’s annual operating profit be paid out as bonuses – permanently. Employee bonuses are currently limited to 50 percent of the base salary.
Due to the historically high profits, these are enormous sums. Based on a forecast profit of around 300 trillion won for 2026 (the equivalent of around 171 billion euros), the union demands would correspond to an average annual bonus of around 350,000 euros per employee. However, the sums would only flow to the employees of the semiconductor division.
Why is the conflict escalating now?
The background is that Samsung Electronics achieved its highest profit since the company was founded in the first quarter of the year thanks to the ongoing AI boom. The operating profit for the period January to March is 57.2 trillion won (the equivalent of almost 33 billion euros) – around eight times the same period last year. Accordingly, the sums at stake in the distribution issue are significantly higher than before.
Samsung’s record profit is driven primarily by continued strong demand for computer chips. Nearly 94 percent of the company’s total profits came from the company’s semiconductor division.
What is the position of Samsung’s corporate management?
Samsung argues that the semiconductor industry is subject to strong fluctuations and that it does not want to commit to large bonus payments in the long term due to cyclical volatility. Management also emphasizes that large sums of money must be prepared for investments in order to remain competitive in the future. High bonuses to the semiconductor workforce would also create tensions with other corporate departments that receive significantly lower payouts.
During several rounds of negotiations, Samsung management is said to have made compromise proposals to its employees, which, however, fell well short of the union’s core demands. According to media reports, Samsung would be willing to pay out up to ten percent of its operating profits as annual bonuses – but only for a maximum of three years and under the condition that the company’s semiconductor division exceeds certain break-even points. The union, on the other hand, demands that 15 percent of operating profits be paid out to employees on a permanent basis.
What does South Korean President Lee Jae Myung say about the conflict?
President Lee Jae Myung, who has been in power since last year, has so far expressed cautious criticism. “Employees should be able to receive appropriate compensation for their work,” wrote Lee in a comment on the online platform X on Monday. However, shareholders who bear potential risks and losses through their investments should also be entitled to their share of the company’s profits. In a previous statement, South Korea’s president criticized the union’s demands as “excessive.” The 62-year-old’s statements are remarkable because he comes from the political left, was once a lawyer for workers’ rights and has a trade union background.
The former trade unionist and current President of South Korea, Lee Jae Myung, is critical of the demands.Image: keystone
How great would the economic damage be from a strike?
South Korea’s central bank estimates in an internal report that the general strike at Samsung could slow the country’s economic growth by 0.5 percentage points this year. According to South Korea’s official news agency Yonhap, the potential losses would amount to around 20 billion US dollars.
The US Chamber of Commerce in South Korea also issued a warning saying the strike could disrupt global supply chains and damage South Korea’s reputation as a reliable technology and manufacturing location. In fact, there are already bottlenecks in chip production as global demand for semiconductors significantly exceeds supply. The threatened general strike at Samsung is likely to further aggravate the situation. (nil/sda/awp/dpa)