Samsung's $400,000 payout for memory workers sparks revolt as other divisions get only $4,000, fueling intentional production slowdowns — internal resentment disrupts packaging operations, major AI chip project decisions to a complete halt
It’s understood that meetings are being canceled across Samsung's non-memory and shared business units.
Samsung's $400,000 payout for memory workers sparks revolt as other divisions get only $4,000, fueling intentional production slowdowns — internal resentment disrupts packaging operations, major AI chip project decisions to a complete halt | Tom's Hardware
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Samsung's tentative profit-sharing deal with its largest labor union averted an 18-day strike just days ago, but the agreement has triggered internal conflict that’s now threatening the company's ability to ship AI memory on schedule, according to a Seoul Economic Daily report published yesterday.It’s understood that meetings are being canceled across Samsung's non-memory and shared business units. That work negligence has become widespread in the foundry and TSP (Test & Package) divisions, which handle the back-end packaging and testing work essential to producing high-bandwidth memory. One source told the publication that “decision-making on major projects has come to a complete halt,” as inter-departmental resentment deepens over the bonus gap.This disruption in TSP could be especially consequential for Samsung as it looks to ramp up its HBM4 production for Nvidia’s next-gen Rubin AI accelerators. TSP uses an integrated turnkey system that routes chips through its own foundry and packaging lines, and any slowdown in back-end operations will directly constrain HBM output as all three major memory producers are racing to fulfill hyperscaler orders.Latest Videos FromAnother source speaking to the publication warned that continued negligence on production and verification lines could damage Samsung's customer relationships and jeopardize delivery commitments.The root of the conflict is a massive disparity in proposed payouts. Under the tentative deal, employees in Samsung's memory division stand to receive bonuses of roughly 600 million won (~$400,000). In contrast, workers in the DX (Device eXperience) division, which covers smartphones, TVs, and home appliances, would receive approximately 6 million won (~$4,000). The deal allocates 10.5% of the semiconductor division's operating profit as stock-based bonuses, with an additional 1.5% in cash.Workers outside the memory unit have pushed back hard, with a smaller union representing DX employees filing a court injunction this week to block the larger, chip-dominated union from handling collective bargaining. That union's membership surged from 3,000 to nearly 13,000 after the deal was announced. Separately, the Korea Shareholder Action Headquarters has threatened legal action, arguing the profit-linked bonus structure requires shareholder approval under Korean law.Union members began casting electronic ballots on Friday, with voting open through May 27. Ratification requires participation from more than half of eligible members and a majority yes vote, but approximately 43,000 non-memory union members within the DS division could swing the outcome. According to reports from Korea, internal message boards have shown strong opposition from workers who view the deal as favoring the memory unit at everyone else's expense.Stay On the Cutting Edge: Get the Tom's Hardware NewsletterGet Tom's Hardware's best news and in-depth reviews, straight to your inbox.Contact me with news and offers from other Future brandsReceive email from us on behalf of our trusted partners or sponsorsSamsung's semiconductor CEO, Jun Young-hyun, urged employees in an internal memo Thursday to move past the conflict, but the dispute now poses a tangible risk to Samsung during what Bloomberg estimates will be a record year, with 2026 operating profit projected at 330 trillion won (~$218 billion).
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Luke JamesContributorLuke James is a freelance writer and journalist. Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.
12 Comments
Comment from the forums
Work in the "right" devision and get a life changing bonus whilst those who work in the "wrong" on get 1% of it and they did not see that this was going to cause loads of problems. It boggles my mind how they could be so short sighted.
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I understand the memory side getting a bit more but at the end of the day the huge profits coming that way are mostly due to the shortage not some brilliant out of this world performance worthy of 100 times better payout.
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I love it... at the end of the day.... people will finally realize, that, One hand washes the other, they both wash the face.
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It's funny because this was one of the terms the union was attempting to quench before it turned into a fire.
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Yea how dare the division with the better profit (memory) get bonusses while the division that are loss making (foundry, LSI) get very little bonus!!!!!!
Its almost as if bonusses are like extras that are supposed to reflect how well the divisions are doing or something, lucky windfall or not......
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Elusive Ruse said:I understand the memory side getting a bit more but at the end of the day the huge profits coming that way are mostly due to the shortage not some brilliant out of this world performance worthy of 100 times better payout.Which is irrelevant, at the end of the day, they are the division that is making these things that are high in demand right now and they should be getting that windfall. It won't last forever but the bonusses can stop then. Memory is a pretty volatile business and presumably their bonusses are also gonna get affected based on other market conditions in normal times, so it's only fair they are rewarded during those good times.
Air2004 said:I love it... at the end of the day.... people will finally realize, that, One hand washes the other, they both wash the face.Plain greed makes people feel green with envy at the end of the day with feelings of false entitlement and negativity, especially since foundry and LSI are loss making. Memory is keeping them alive within Samsung Device Solutions.
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Kicapan07 said:Yea how dare the division with the better profit (memory) get bonusses while the division that are loss making (foundry, LSI) get very little bonus!!!!!!
Its almost as if bonusses are like extras that are supposed to reflect how well the divisions are doing or something, lucky windfall or not......Yet it doesn’t reflect how well they’re doing their job, it’s just that external circumstances have led to it. The quality of the memory is the same, their performance is the same best case scenario a bit better but not that much.
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I love seeing greed tear things apart. I hope the disease spreads to other companies that hold greed so high!
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Time for the suits to cough up the money.
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Kicapan07 said:Yea how dare the division with the better profit (memory) get bonusses while the division that are loss making (foundry, LSI) get very little bonus!!!!!!
It’s almost as if bonusses are like extras that are supposed to reflect how well the divisions are doing or something, lucky windfall or not......100 to 1 bonus size disadvantage basically because of luck - almost anyone would feel foundationally wronged. Using divisions here for pay boundaries is an arbitrary decision by the C suite, and the other Samsung employees know it.
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📰Originally published at tomshardware.com
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