The biggest workers' union at South Korea's Samsung Electronics has threatened to disrupt chip production as members vote on a plan to strike in May, its leader told Reuters.

A strike at the world's largest maker of memory chips could worsen bottlenecks in global supply of semiconductors stemming from robust demand for artificial intelligence data centre operations that has curbed supply to industries from cars and computers to smartphones.

"I expect there would be production disruption," Choi Seung-ho, who leads the Samsung Electronics Labour Union (SELU), said last week, as voting got underway.

About 90,000 unionised workers from Samsung's South Korean workforce of 125,000 are eligible to cast ballots in voting that runs until Wednesday.

If the workers fail to agree a deal, they plan to strike for 18 days from May 21, Choi said, adding that could affect about half the output at Samsung's sprawling semiconductor complex in Pyeongtaek, south of Seoul, the capital.

A Samsung official said production halts caused by "even a single strike" could damage trust with customers and take years to recover, speaking on condition of anonymity, as the issue is a sensitive one.

A Samsung spokesperson said the company would continue its dialogue with employees "in a sincere manner."

Union membership surge

Samsung employees' growing frustration over a pay gap with key rivals drove a surge in membership of the union in the weeks after chipmaker SK Hynix accepted its union's demand for compensation reforms in September, Choi said.

"The chip industry is booming, but those gains aren’t trickling down to us. That’s why we’re fighting."

In the past three months, more than 100 union members have left South Korea's biggest employer for firms such as SK Hynix, which approved a plan to lift its bonus cap and devote 10% of operating profit to a bonus pool, Choi said.

The Samsung union is seeking a 7% increase in base wages, the scrapping of a cap on performance pay at 50% of annual base salary and the introduction of a bonus pool based on operating profit to replace criteria the union calls outdated and opaque.

Samsung posted record fourth-quarter profit in 2025 and analysts expect annual operating profit to more than quadruple to over $134 billion this year.

In an internal memo to employees early this month, Samsung said it tried to reach a 2026 wage deal by offering "unprecedented" compensation proposals.

Its offer includes a pay increase of 6.2% and special bonuses for memory chip division employees equivalent to 100% of base wage for every 100 trillion won in annual operating profit.

"As semiconductor business experiences big profit fluctuations depending on market conditions, Samsung allocates operating profit in a balanced way to future investments, shareholder return and employee compensation," the spokesperson said.

'Lacking labour relations experience'

Samsung workers walked out for the first time in 2024, after Chairman Jay Y. Lee pledged to shed its reputation of a "no-union" policy in 2020.

The group had long been free of union risks, unlike other major Korean industrial groups, such as Hyundai Motor, leading to a lack of experience and expertise in managing labour relations, said Seo Ji-yong, a business administration professor at Sangmyung University.

"If the management is stuck in the past and ignores union demands, the disputes could throw cold water on Samsung’s earnings momentum," he said.

A Samsung chip division employee with a base pay of 76 million won would receive 38 million won in performance pay for 2025, or less than a third of the figure a similarly paid SK Hynix employee would qualify for, the SELU says.

The gap would widen this year, if the current bonus scheme continues, it said.

"If we’re number one, we should be treated like number one," Choi said, adding that Tesla was also wooing its chip designers with generous offers. "This will motivate employees to work harder and raise Samsung's competitiveness."

In February, Tesla CEO Elon Musk urged workers in South Korea's chip industry to apply for jobs at the automaker, as it makes a big push into AI chips used in self-driving cars and humanoid robots.

Unlock more exclusive Cybernews content on YouTube.