South Korea’s Samsung Electronics has become one of the biggest beneficiaries of the artificial intelligence boom. The company is currently facing a battle over who deserves a share of the profits.
Talks between Samsung and the company’s largest labor union have broken down, with some 48,000 workers scheduled to begin an 18-day strike on Thursday over bonuses and profit sharing, Yonhap News reported.
Samsung shares fell as much as 5% following reports that negotiations had broken down.
The controversy comes at a sensitive time for Samsung, which recently joined the $1 trillion club as investors flock to AI-related semiconductor stocks. The tech giant’s stock has more than doubled this year.
Samsung is at the center of the AI supply chain through its memory chip business, which manufactures high-bandwidth memory chips used in AI servers.
Morningstar equity analyst Jing Jie Yu said on Tuesday that the fallout from the prolonged labor dispute could extend far beyond temporary production disruptions.
“The main hurdle is Samsung’s refusal to formalize profit sharing in the contract,” Yu wrote in the memo.
Mr. Yoo warned that if Samsung cannot offer more competitive compensation, it risks falling behind its rivals. He argued that Samsung’s weak pay structure could hurt the company both immediately and in the long term, pointing to rival SK Hynix, which distributes 10% of operating profits to employees and has removed caps on bonuses for 10 years.
Yu estimated that the 18-day strike could reduce Samsung’s 2026 operating profit by about 5%.
An even bigger concern is talent, he said, adding that lower compensation could make it harder for Samsung to retain and attract the engineers it needs to stay competitive in the AI chip race.
Not everyone believes the labor dispute will derail Samsung’s AI-driven stock rally.
Jeff Kim, head of technology research at South Korea’s KB Securities, said concerns over strikes and bonuses are likely already factored into stock prices.
“Earnings momentum should further increase regardless of strike concerns,” Kim wrote in a note Wednesday.
Kim argued that demand for AI memory chips is outpacing available supply as major US tech companies continue to pour money into AI infrastructure. He said the consumption boom would continue to push up chip prices and profits even as labor tensions intensify.
The Samsung labor dispute has evolved into a broader political debate over who should share in the profits from AI.
Last week, South Korea’s presidential policy chief Kim Yong-beom said a portion of the profits and tax revenues generated by AI should be “structurally returned to all citizens,” arguing that the benefits were built on decades of national industrial investment.
The official’s Facebook post on Monday night roiled South Korea’s red-hot stock market, sending the benchmark Kospi index down as much as 5.1% the next day. The stock prices of Samsung and rival SK Hynix also fell sharply.
Kospi has risen about 65% this year after hitting a record high last Thursday on investor enthusiasm for the AI-related chipmaker.
The benchmark index, in which Samsung accounts for about a third of its constituents, had fallen more than 2% by midday on Wednesday as concerns over the labor dispute spooked investors.