Samsung union demands bigger bonuses after criticizing HBM strategy
May 11 (Asia Today) -- A labor dispute at Samsung Electronics is escalating just as the company regains momentum in the global artificial intelligence memory market following setbacks in high-bandwidth memory, or HBM, development.
Samsung's labor union, which criticized management in 2024 for falling behind rivals in HBM technology, is now demanding that workers receive 15% of operating profit as performance bonuses after the company's earnings rebounded.
According to the electronics industry on Sunday, Samsung management and labor representatives began a two-day post-mediation process focused on bonus negotiations. The union is demanding the removal of bonus caps and distribution equivalent to 15% of operating profit.
Industry officials warned the dispute could disrupt operations and increase labor costs at a critical time for the company's long-term semiconductor investment plans.
Samsung's semiconductor division faced criticism in recent years after scaling back HBM research and development in 2019 during a downturn in the memory chip market. At the time, the company prioritized profitability and cost competitiveness as memory prices weakened globally.
Executives reportedly viewed HBM technology as costly and commercially uncertain because the market for AI-driven computing had not yet emerged.
That calculation later proved costly after the rise of generative artificial intelligence applications, including ChatGPT developed by OpenAI, sharply increased global demand for advanced memory chips.
Samsung accelerated its HBM strategy after Vice Chairman Jun Young-hyun took charge of the semiconductor business in 2024. The company established a dedicated HBM development team and focused on HBM3, HBM3E and HBM4 technologies.
Samsung succeeded in beginning mass production shipments of HBM4 in February and said it plans to introduce HBM4E products this year and customized HBM products next year.
The company's research and development spending rose from 20.2 trillion won ($14.7 billion) in 2019 to 37.8 trillion won ($27.5 billion) last year. Total spending on research and facility investment this year is expected to reach 110 trillion won ($80.1 billion), including 11.3 trillion won ($8.2 billion) invested during the first quarter alone.
Despite the rebound in memory chips, analysts said Samsung still faces structural challenges because memory accounts for only about 30% of the global semiconductor market, while system semiconductors make up the remaining 70%.
The company is under pressure to expand its presence in system large-scale integration chips and contract chip manufacturing, also known as foundry services, which require sustained long-term investment.
The labor dispute has also drawn attention from global investment banks. JPMorgan Chase warned that accepting the union's demands could reduce Samsung's annual operating profit by as much as 12%.
Citigroup lowered its target price for Samsung shares from 320,000 won ($233) to 300,000 won ($219), citing risks tied to labor-management tensions.
-- Reported by Asia Today; translated by UPI
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This story was originally published May 12, 2026 at 7:15 PM.