Samsung is facing one of its most tense internal moments in years, as unionized workers push harder for major pay and bonus increases just as the company’s semiconductor profits surge. With the memory business generating a rapidly growing pool of cash, demands that started within chip-related teams are now echoing across other divisions too, intensifying pressure on leadership to “share the upside” more broadly.
That widening compensation gap is exactly what has Samsung’s executives weighing a drastic, once-unthinkable move: spinning off its semiconductor-focused Device Solutions (DS) division into a separate company.
Why would Samsung consider breaking up a cornerstone of its business? The core issue is that Samsung’s profitability varies dramatically from one unit to another. The DS division—home to memory chips and foundry operations—can generate outsized earnings compared to areas like home appliances and other consumer-focused segments. As calls for semiconductor-level compensation spread, management is increasingly boxed in: match bonuses across the board and strain less profitable units, or hold firm and risk escalating labor unrest.
During a recent discussion involving South Korean government officials, a Samsung-side participant reportedly pointed to the internal profit imbalance and the resulting labor conflict, suggesting that the company struggles to align compensation between the high-earning semiconductor arm and other sectors. The same view acknowledges a major downside: any spin-off could trigger significant shareholder backlash, particularly if investors believe it would erode long-term value.
The urgency behind these behind-the-scenes conversations is tied to an escalating standoff with organized labor. Union workers are demanding bonuses equal to 15 percent of Samsung’s annual operating profit—described as roughly $30 billion. If no deal is reached, the union has threatened an 18-day strike scheduled from May 21 through June 7.
Workers have already displayed their organizing power in a major rally held on April 23, which reportedly drew as many as 40,000 participants. Following the event, the union estimated that output dropped sharply across key production areas—especially in more labor-intensive operations. While memory fabrication plants rely heavily on automation, the company’s foundry lines typically require more hands-on work, and were cited as seeing an especially steep decline.
For Samsung, the bigger concern isn’t only what happens during a walkout—it’s what happens after. Semiconductor manufacturing depends on constant monitoring, routine setup, and ongoing equipment maintenance. When these processes pause for an extended period, restarting isn’t as simple as flipping a switch. The union has argued that recovery time could stretch far beyond the strike itself, potentially taking twice as long to restore normal operations. In practical terms, an 18-day stoppage could translate into more than a month of disruption.
That risk helps explain why Samsung leadership appears to be exploring extreme options to prevent similar turmoil in the future. Whether a DS spin-off is a serious strategic plan or a high-stakes signal in negotiations, the fact that it’s being discussed at all shows how intense the labor dispute has become—and how vital uninterrupted chip production is to Samsung’s global business.
