Update | Samsung strike may inflate memory prices, as union dispute over profits intensifies

Demand from AI data centers has driven a surge in revenue for chipmakers like Samsung. Now, the workers who produce the components are lobbying for a greater share of profits. The ongoing negotiations hit another snag, with already high memory prices threatened by any stoppage.

Tom’s Hardware covered a paywalled story from the British Financial Times. The union seems willing to accept 13% of Samsung's operating profits, divided among the employees. Unfortunately, the company is hesitant to commit to the perk on a yearly basis. The two sides may have different views on how long the AI boom will last.

The employees argue that a major competitor, SK Hynix, issued much larger bonuses to its workers. The Samsung union has also called for a 7% wage increase and for the 50% cap on bonuses to be eliminated.

A strike could rock the fragile DRAM market

The industry has seen the ramifications of a temporary stop in production. On April 23rd, around 40,000 union members walked out of a Pyeongtaek factory in protest. It’s estimated that output dropped by as much as 58% percent during the brief interruption. A longer pause could exacerbate the storage and memory shortage and eventually raise prices further.

If the union’s demands aren’t satisfied, an 18-day strike between May 21st and June 7th looms. In the worst-case scenario, an analyst provided the Financial Times with a grim forecast. The chipmaker could lose up to $11.7 billion, while rivals benefit.

Although AI companies target high-bandwidth memory (HBM), the trickle-down effects would impact other DRAM. Gamers and PC builders are already frustrated by unreasonable DDR5 memory prices. Making matters worse, a handful of manufacturers supply the world with modules. SK Hynix and Micron would struggle to offset a dwindling supply caused by a Samsung strike.