The chips powering the AI revolution are made by workers who say they aren’t sharing in the spoils. Starting May 21, more than 45,000 of them may stop making those chips for 18 days.

Samsung Electronics faces what would be the largest strike in its history — a labor dispute born directly from the artificial intelligence boom that has sent demand for memory chips soaring. The very prosperity filling Samsung’s coffers is now fracturing its workforce.

The dispute turns on a question of fairness and arithmetic. Samsung has offered its 27,000 memory chip employees bonuses worth up to 607% of their annual salaries, outpacing even rival SK Hynix’s generous payouts. But the company’s other 23,000 workers, who design and manufacture logic chips and foundry services for clients like Nvidia and Tesla, would receive bonuses of just 50% to 100%.

Same buildings. Same company. Wildly different paydays.

The Logic Chip Penalty

Samsung’s memory division is minting money amid a global chip shortage. Its foundry and system LSI businesses have been bleeding — posting losses in the trillions of won. Management says the bonus gap reflects reality.

“They, the logic chip business, posted losses in the trillions of won and honestly, if it had not been for our company, they probably would have gone out of business or closed down,” Samsung executive and negotiator Kim Hyung-ro said during wage negotiations, according to transcripts reviewed by Reuters. “So how can you justify giving performance bonuses?”

The union sees it differently. Foundry workers produce “base die” components essential to AI chips. They work alongside memory colleagues. And they are already leaving.

“If the memory division gets 500 million won while the foundry division only gets 80 million won, what motivation would those employees have to keep working?” union leader Choi Seung-ho said during negotiations.

A foundry engineer surnamed Lee told Reuters his team has shrunk sharply as colleagues decamped for Samsung’s memory unit and SK Hynix. A chip researcher with 30 years at Samsung said he applied to work at Micron. “I no longer have pride in Samsung,” he said.

Billions at Stake

JPMorgan estimates an 18-day strike could cost Samsung between 21 trillion and 31 trillion won ($14.08 billion to $20.79 billion) in operating profit, with sales losses of about 4.5 trillion won. The bank said the production impact could exceed initial expectations, reflecting broader worker participation.

Samsung’s shares fell as much as 5.9% on May 15 after government-mediated talks collapsed and the union confirmed it would proceed. Samsung has since proposed unconditional negotiations, but the union said it would only return to the table after June 7 — well after the strike is scheduled to begin.

AI data centers now consume an estimated 70% of high-end memory chips produced worldwide, according to TechCrunch. Samsung, SK Hynix, and Micron are all racing to meet that demand. A prolonged disruption at the world’s largest memory chipmaker would ripple through Silicon Valley and beyond, compounding a shortage that has already sent conventional DRAM prices soaring.

A Structural Problem

The conflict exposes the tension at the heart of Samsung’s unusual strategy. Unlike specialized rivals such as TSMC or Micron, Samsung aims to be a “one-stop shop” spanning memory, logic chip design, and foundry manufacturing. The AI boom has made those divisions wildly unequal in profitability — and the bonus structure has turned colleagues into competitors.

“The issues are partly self-inflicted by the company,” said Namuh Rhee, a Yonsei University professor and chairman of a Korean corporate governance group. “Samsung must enable foundries to become self-reliant.”

South Korea’s government is alarmed. Industry Minister Kim Jung-kwan said a strike would cause irreparable damage to the economy and that emergency arbitration could be unavoidable. Samsung Chairman Jay Y. Lee warned in an internal memo that a walkout could trigger capital outflows, falling tax revenue, and a weakened won.

The Bigger Question

Samsung’s workers are not the first to notice that AI boom profits flow unevenly. They may not be the last.

The companies building AI infrastructure face a mounting tension: the technology promises to automate work out of existence while generating enormous wealth for those at the top of the supply chain. Samsung’s 45,000 workers simply have enough leverage to do something about it.

Whether they use it — and whether Samsung blinks before May 21 — will be watched far beyond Seoul. As Korea University law professor Park Ji-soon noted, the outcome could set a precedent for labor relations across the country’s export-driven economy.

Samsung said in a statement it “will offer its employees the best compensation in the industry” and warned that a failure to deliver to customers would result in a complete loss of trust.

The union has 45,000 members who disagree.

Sources