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Desk: Samsung Electronics, the world’s largest memory chip maker, is facing a major labor crisis. After talks between the management and the union regarding bonus payment failed, 48 thousand employees are preparing to go on strike from Thursday. This strike can become a big concern not only for Samsung but also for South Korea’s economy and the global semiconductor supply chain. The demand for chips has already increased amid the AI ​​boom and at such a time, the threat of production being affected is increasing the concern of the market.

According to the report, talks were going on between Samsung Union and the company for several days regarding bonus payment, but no solution could be found. The union’s demand was that the bonus limit should be abolished and 15 percent of the company’s annual operating profit should be given to the employees. Union leader Choi Seung Ho said that they had accepted the final proposal brokered by the government, but the company did not agree on the last issue. On the other hand, Samsung says that the union’s demands are excessive and accepting them will affect the company’s operating principles. After this controversy, Samsung’s shares have also declined.

Samsung handles about a quarter of South Korea’s total exports and is the world’s largest DRAM memory chip maker. In such a situation, if the strike continues for a long time, it may affect the entire global chip supply chain. There is already huge demand for high-bandwidth memory chips in the AI ​​industry and any disruption in production could push prices higher. An official of South Korea’s central bank has warned that in a worst-case scenario the strike could reduce the country’s economic growth rate by 0.5 percent. The government has indicated that if necessary, emergency arbitration can be invoked to stop the strike.

A major reason for the dissatisfaction of Samsung employees is the increasing salary gap with rival company SK Hynix. The union claims that last year SK Hynix employees received three times more bonuses than Samsung employees. This is the reason why many employees are leaving Samsung and moving to SK Hynix. The special thing is that SK Hynix has made huge progress in supplying high bandwidth memory required for AI chips and is supplying to companies like Nvidia. Market experts believe that if the strike does not last too long, there will be limited impact on supply, but it will definitely increase investor sentiment and pressure on memory industry prices.