Samsung Electronics is facing one of the biggest workforce crises in its history. Price and performance bonus negotiations, which have been going on for months between the South Korean technology giant and the National Samsung Electronics Union (NSEU), the largest labor union in the company, are completely blocked. After failing to reach an agreement in critical meetings that lasted for hours and were held under the mediation of the government, the union announces that it has decided to go on a massive strike, which will start on Thursday, May 21st.

This massive work stoppage, which is expected to involve approximately 48 thousand employees, causes the cards to be shuffled again in the technology world at a time when artificial intelligence investments are at their peak and global demand for memory chips is at its peak. After the decision became official, the company’s shares in the stock market immediately lost 3 percent of their value, while the cyber world and hardware market experienced deep anxiety at the possibility of production lines stopping.

• 18-Day Massive Work Stoppage:The union representing 48 thousand employees within Samsung is preparing for a historic strike that will last 18 days, starting from May 21, after failing to reach a common ground with the management regarding bonus and premium payments.

• Demand for Share of Artificial Intelligence Profits:Performance bonuses are at the center of the crisis; Employees want the company, which announced record profits with the artificial intelligence boom, to transfer 15 percent of its annual operating profit to the bonus pool and to remove the bonus ceiling.

• Global Chip Supply in Danger:Samsung holds approximately 36 percent of the worldwide DRAM memory market, and analysts predict that this long-term strike could directly reduce global memory and NAND production capacity, increasing hardware prices.

Behind the Scenes of the Crisis: Employees Want a Share of the Artificial Intelligence Pie

The main reason for the long-smoldering fire within Samsung Electronics stands out as the imbalance between the company’s financial statements and the wallets of its employees. Massive global investments in artificial intelligence technologies in the last two years are expanding the demand for high-bandwidth memory (HBM) and DRAM chips, which are vital for data centers and high-performance servers.

In the process, Samsung is making record operating profits in the tens of billions of dollars. However, this situation triggers a new discussion among the personnel at the center of production.

The National Samsung Electronics Union (NSEU) argues that employees have a direct stake in this great artificial intelligence success. In the current system, the maximum bonus amount that employees can receive is 50 percent of their annual salary.

The union demands that this upper limit be removed completely, that 15 percent of the total annual operating profit be allocated to bonus payments, and that this system be transformed from a temporary gesture into a permanent contract element. The company management leaves the table, stating that these demands are “unacceptable” and will harm the principles of corporate governance.

The fact that SK Hynix, Samsung’s biggest rival, relaxed the bonus deadlines and offered higher bonuses to its employees in a similar period, stands out as another factor that increases the unrest among Samsung employees and their tendency to resign.

How Will the World of Technology Be Affected If Production Lines Stop?

The 48 thousand workers who will participate in the strike correspond to approximately 38 percent of Samsung Electronics’ total workforce in South Korea. More importantly, it is stated that this work stoppage will be most severely in semiconductor and chip production facilities.

Semiconductor production consists of factories that, by their nature, are extremely sensitive, sterile and must operate uninterruptedly. Stopping production in these facilities, even for just a few hours, can lead to damage to silicon wafers and irreversible hardware losses worth billions of dollars.

A New Wave of Increases in RAM and SSD Prices is Coming

Cyber ​​security analysts and market researchers warn that the effects of this strike, which is planned to last 18 days, on the consumer electronics market may be very severe. According to the simulations, the slowdown in production in factories due to the strike carries the risk of directly reducing the total worldwide DRAM memory supply by 3 to 4 percent and the NAND flash storage supply by 2 to 3 percent.

These seemingly small percentage decreases have the power to directly affect the production of video cards (GPU), computer memories (RAM) and solid state drives (SSD) in the market, which is already under pressure from artificial intelligence data centers. With the decrease in supply, it is predicted that hardware prices for players and end users will rise again.

South Korean Government Vigilant to Prevent Economic Disaster

Samsung is the largest locomotive of the country’s economy, accounting for approximately one quarter (25 percent) of South Korea’s total export volume. Therefore, this strike is not just a company’s internal problem but turns into a national economic security problem.

Although the last mediation plan was presented by the South Korean National Labor Interests Commission to reconcile the parties was accepted by the union, the fact that the company management is not keen on this formula causes a complete rupture.

Urgent Arbitration Process May Be Started

Faced with the seriousness of the situation, South Korean government officials are also officially on alert. According to the law, the government has the right to use the “Emergency Arbitration” power to prevent critical strikes that would cause a severe blow to the country’s economy.

If this legal system, which is rarely used, is put into effect, the government can compulsorily restart mediation negotiations and legally postpone the planned strike decision for 30 days.

However, Ministry of Labor officials state that the doors of dialogue are still open and that the parties continue to put pressure through official channels to reach a compromise at the last minute. In these critical days when the global technology supply chain is hanging by a thread, every news coming from Samsung factories is watched with bated breath by the whole world.