Samsung and a South Korean labor union left the desk with out a deal on Tuesday. With these negotiations a part of a last-ditch effort to salvage relations forward of a deliberate Could 21 strike that might final two weeks, ripples throughout the AI biz globally are more and more possible.
The AI {hardware} world is little question holding its breath for what occurs subsequent since Samsung’s three manufacturing websites in South Korea, at Giheung, Hwaseong, and Pyeongtaek, all make parts for cloud and excessive efficiency computing, together with essential AI reminiscence manufacturing—which is on the coronary heart of the labor dispute. Samsung and its bitter native rival SK Hynix are two of solely three firms on the earth that make it.
Based on Reuters, union consultant Choi Seung-ho stated he regretted that “not one of the agenda objects requested by the union have been addressed.” At concern is a union demand {that a} cap on bonus pay be abolished. SK Hynix took the identical motion in 2025 and, per Reuters, worker bonuses at that firm skyrocketed to a few instances what Samsung staff can obtain. Widespread union exercise at Samsung reportedly quickly adopted.
How unhealthy would a strike be for the AI enterprise? Properly, in April there was a one-day strike at Samsung led by this union, and manufacturing dropped proper off. The output from its chip foundry reportedly plunged 58.1%, whereas its reminiscence fabrication vegetation reportedly sank by 18% through the related shift.
One estimate from the union positioned potential firm losses from the total strike at an astonishing 30 trillion gained—which might be about $20 billion. That’s an enormous quantity from what’s admittedly removed from a impartial supply, however massive numbers are merited right here.
In any case, Samsung’s latest income spike from AI parts has been mind-boggling. In quarter one in every of 2026, Samsung reported an virtually 50-fold year-over-year rise in revenue from chips. Samsung simply crossed the $1 trillion valuation mark this month, and it’s now the eleventh largest firm on the earth by market cap.
On the similar time, SK Hynix truly exceeded it when it comes to total income final yr. SK Hynix invested closely in AI-friendly high-bandwidth reminiscence (HBM) know-how in 2024, getting the leap on Samsung, and establishing itself as an important a part of the AI reminiscence provide chain. Even mixed, the 2 firms can’t manufacture HBM quick sufficient to fulfill present demand.
Reuters notes that Shin Je-yoon, Samsung’s chairman of the board, stated he was “fearful about shedding market management amid fleeing clients and falling competitiveness” within the occasion of a strike.
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