The global chip market, already facing shortages, may encounter a significant disruption in May. According to reports, the Samsung Electronics labor union announced on March 18th that voting results showed a collective action proposal passed with 93.1% approval. Barring major changes, union members are set to stage a full-scale strike from May 21st to June 7th. This action is reported to be the largest strike plan in Samsung's history. The union chairman previously stated that if implemented, the strike could affect approximately half of the production capacity at the Pyeongtaek campus, leading to significant production interruptions. The Pyeongtaek facility is a major global supplier of Dynamic Random-Access Memory (DRAM) and High Bandwidth Memory (HBM). Public data indicates that Samsung, as the world's largest memory chip manufacturer, holds a market share of 43%. Within the memory sector, its share of the DRAM market reaches 60%. A strike at Samsung could exacerbate the global semiconductor supply bottleneck. Currently, strong demand from artificial intelligence data centers has already constrained semiconductor supplies for industries ranging from automobiles and computers to smartphones. A union leader stated that growing dissatisfaction among Samsung employees regarding the widening pay gap with major competitors led to a surge in union membership last September, after chipmaker SK Hynix accepted its union's demands for pay reforms. He said, "The chip industry is booming, but these benefits have not reached us. That is why we are fighting." Over the past three months, more than 100 union members have reportedly left Samsung, South Korea's largest employer, for companies like SK Hynix. SK Hynix approved a plan to raise the bonus cap and allocate 10% of operating profit to a bonus pool. The Samsung union is demanding a 7% base salary increase, the removal of the performance pay cap (currently 50% of the annual base salary), and the introduction of an operating profit-based bonus pool to replace what it calls outdated and opaque standards. Samsung Electronics reported record profits in the fourth quarter of 2025, and analysts expect its annual operating profit to more than triple this year, exceeding 200 trillion won (approximately $134 billion). Notably, in an internal memo to employees earlier this month, Samsung stated it had attempted to reach a 2026 wage agreement by proposing an "unprecedented" compensation package. The offer included a 6.2% pay raise and special bonuses for employees in the memory chip division, equivalent to 100% of base salary for every 100 trillion won in annual operating profit achieved. A Samsung spokesperson stated, "As the semiconductor business experiences significant profit fluctuations based on market conditions, Samsung distributes operating profit evenly between future investment, shareholder returns, and employee compensation." An analyst recently commented that Samsung Electronics is entering a period of full profit growth, with its entire memory chip supply potentially sold out by 2027. The analyst noted that surging demand from AI and limited industry supply growth are expected to keep the DRAM and NAND markets tight for years to come, with major tech companies increasingly considering five-year supplier agreements (through 2030) to secure supply. The analyst's firm raised its target price for Samsung Electronics shares by 33% to 1.32 million won. The analyst also indicated that the 2026 operating profit estimate for Samsung has been raised by 30% to 220 trillion won, and the 2027 estimate has been increased by 57% to 301 trillion won.
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