Unionized workers from Samsung Electronics stage a protest in front of its production line in Pyeongtaek, Gyeonggi Province, April 23. Korea Times photo by Shim Hyun-chul
Samsung Electronics’ move to cut its chip output is fueling concerns over major disruptions to global customer deliveries, after the chipmaker failed to reach a wage agreement with its unions, industry officials said Friday.
More than 43,000 unionized workers — mostly from the firm's Device Solutions Division, which oversees the company’s semiconductor business — are set to begin an 18-day strike on Thursday following the latest deadlock in negotiations. They are demanding fixed performance bonuses equivalent to 15 percent of the operating profit generated by the company’s semiconductor division, along with the removal of the payout cap.
The output reduction is expected to strain the global semiconductor supply chain at a critical time when demand for memory chips — particularly high-bandwidth memory — far exceeds supply in the era of artificial intelligence (AI).
Samsung is a major supplier of memory chips to global tech giants, such as Nvidia, Apple, AMD, Google and Meta.
Semiconductor manufacturers typically reduce their production in response to weakening market demand, inventory adjustments or a downturn in the industry. However, Samsung's latest production adjustment is unusual in that it is a preemptive move to prepare for strike risks rather than market conditions.
At a time when demand for AI chips is surging and memory supply is already tight, the world’s largest memory chipmaker is reducing output due to the possibility of a strike. Analysts say this could be seen as a warning sign for the global semiconductor supply chain.
"Even after the 18-day strike ends, it will likely take an additional two to three weeks to restart and normalize automated production lines," Kim Dong-won, a researcher at KB Securities, said in a recent report.
Market watchers warn that such a prolonged production gap could trigger ripple effects across the global tech industry, potentially delaying shipments of AI servers, smartphones and data-center equipment that rely heavily on advanced memory chips. The disruption may also intensify price volatility and deepen procurement uncertainty for major customers rushing to secure supply.
The American Chamber of Commerce in Korea (AMCHAM) also warned that Samsung’s labor dispute could ripple through global chip supply chains.
Source: Korea Times News
