Samsung Electronics is seeing an increasingly stark performance gap between its semiconductor business (DS) and its device business (DX), and the divide is now spilling into open friction inside its labor groups.
According to industry officials on May 5, Samsung’s first-quarter results showed the DS division posting more than 53 trillion won in operating profit, accounting for most of the company’s earnings. The DX division, which covers mobile phones, TVs and home appliances, posted about 3 trillion won over the same period. DS operating margins were well above 60%, while DX margins were in the single digits.
Some in the industry are even raising the possibility that DX could post an annual loss, and analysts say restructuring has already begun in parts of the home-appliance business.
That imbalance has become a direct backdrop to labor tensions. A joint struggle committee led by an umbrella union has demanded that Samsung pay 15% of DS operating profit as performance bonuses and has signaled the possibility of a strike. That would amount to several hundred million won per person, a level some outsiders view as excessive.
Amid the dispute, the Donghaeng union, made up largely of DX workers, formally withdrew from the joint committee on May 4. The union cited DS-centered agenda-setting and a lack of internal communication as reasons for leaving.
Some observers say the split reflects more than a tactical disagreement, arguing that outsized compensation demands — raised as DS workers view the division’s results as their own achievement — have widened cracks across the organization. They also say a DS-driven labor campaign does not match the reality facing DX employees under restructuring pressure.
Shin Je-yoon, chairman of Samsung Electronics’ board, recently posted a message on the company’s internal bulletin board urging the sides to close ranks. “For the semiconductor business, a foundational national industry, timing and customer trust are key,” he wrote, warning that development or production disruptions and missed delivery dates could “undermine fundamental competitiveness,” drive customers to rivals and erode market leadership. He added that it was time for employees to unite and resolve issues through “sincere dialogue.”
There are also reports that some global customers are stepping up checks on delivery stability risks and monitoring the possibility of internal production disruptions.
Many in the industry view the situation as more than a wage dispute, saying it reflects structural change and conflicting interests between business divisions. As long as DS continues to post strong results, the case for bigger bonuses may persist, but from a companywide perspective it could weaken internal cohesion. Experts say the semiconductor business now faces the need to manage internal conflict risks alongside external competition.
An industry official said the DS union’s bonus push has spread beyond concerns about competitiveness to broader internal conflict, creating a crisis that could damage the strength of the Samsung brand.
* This article has been translated by AI.
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