Concerns are growing that internal conflicts at Samsung Electronics could undermine its competitiveness in high-bandwidth memory (HBM). The Device Solutions (DS) division is threatening a strike over demands for increased bonuses, while the Device Experience (DX) division expresses feelings of deprivation amid declining profitability and the withdrawal from the Chinese TV and home appliance market. Analysts warn that these internal rifts could negatively impact Samsung's position in the global AI semiconductor race.
According to industry sources, the Samsung Electronics labor union plans to initiate a strike starting May 21 if wage negotiations with management fail. The main issue is the demand for performance-based bonuses linked to improved earnings in the DS division due to rising AI semiconductor demand and a recovery in the memory market.
The mood within the DX division is tense. Samsung recently announced its official withdrawal from the Chinese TV and home appliance market, a decision attributed to aggressive pricing from local competitors and weak demand. However, many in DX view this as a retreat from a core business.
Given that TVs and home appliances have long been key drivers of Samsung's global brand value, the anxiety among DX employees is palpable. While attention focuses on the DS division's impressive performance and the expansion of the AI semiconductor market, DX workers feel their contributions, especially in light of challenges like U.S. tariffs, are overlooked.
The recent departure of the Donghaeng Union, which has many members in the DX division, from the joint labor struggle reflects dissatisfaction over the focus on DS's bonus demands, sidelining DX issues. The Donghaeng Union has sent a letter to the inter-company union and the National Samsung Electronics Labor Union, urging adherence to fair representation obligations, including sharing negotiation information and preventing discrimination.
A DX official noted, "With nearly half of the company's workforce in DX, it will be difficult for management to fully accept the demands centered on DS. I believe DS employees should make concessions before more extreme conflicts arise."
Industry analysts suggest that the internal discord at Samsung could significantly impact its HBM and memory semiconductor competitiveness. The DS division struggled in HBM competition until mid-2022 but began regaining momentum late last year, though it has yet to establish fundamental competitiveness.
Experts emphasize that major tech clients like NVIDIA prioritize quality, yield, and delivery stability when selecting suppliers. If a strike occurs, the damage to customer trust could be more severe than short-term production disruptions. Concerns are rising that repeated factory shutdowns could lead to yield declines and quality issues, as HBM involves complex processes requiring strict quality control. Fluctuating yields could result in losing key clients.
An anonymous Samsung executive stated, "The union claims a strike could result in losses of tens of trillions of won, and external estimates suggest that halting semiconductor production could cost 1 trillion won daily. HBM is ultimately a yield battle, and if production lines are repeatedly halted, we risk losing our stable supplier status with key clients like NVIDIA, which is the most serious risk."
* This article has been translated by AI.
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