Samsung Electronics (005930.KS) is facing growing concerns over delivery delays of artificial intelligence (AI) memory chips ordered by global Big Tech firms, as conflict between its memory division and other business units over a tentative bonus agreement reaches a peak. Internal meetings are being canceled one after another and instances of work negligence have become commonplace, raising unprecedented signs of operational paralysis and prompting an emergency response on workforce management.
Samsung Electronics, which had come to the brink of a strike, appeared to have settled the conflict on the 20th with a tentative labor-management agreement. However, the bonus gap between business units within the Device Solutions (DS) division reaches up to 400 million won, and a massive disparity has emerged with bonuses in the Device eXperience (DX) division covering mobile and home appliances, causing "labor-vs-labor" conflict and internal discontent to spread uncontrollably.
According to industry sources on the 22nd, the conflict over bonuses between Samsung Electronics' memory division and members of non-memory divisions and business units has reached its peak, causing significant disruptions to operations at non-memory and common business units, including the foundry (contract chip manufacturing) and Test & Package (TSP) divisions.
Frontline departments are seeing an intensifying work vacuum, with scheduled meetings being canceled. A source familiar with internal Samsung Electronics affairs said, "There is a frightening atmosphere in which neither camaraderie nor friendship can be found within the company, as inter-departmental conflict has deepened due to the sense of loss from the bonus gap," adding, "It is fair to say that decision-making on major projects has come to a complete halt."
The core of this conflict lies in differences in bonus size by business unit. Employees in non-memory and common business units, who will not receive compensation on par with the memory division that led the earnings recovery, are forming opinion to reject the tentative agreement, saying they "cannot accept a structure in which only the memory division monopolizes." On internal bulletin boards, there is considerable heated opinion saying, "Rather than letting the memory division monopolize hundreds of millions of won in bonuses, we will reject the agreement."
The number of union members in the non-memory and common business units currently leading the opposition reaches approximately 43,000. With the union's joint struggle headquarters needing to secure more than half, or 43,500 votes in favor of the tentative agreement, opposition votes from non-memory union members within the DS division are analyzed to exert significant influence on the voting result, which closes on the 27th.
Following Labor-Management Conflict, Now Worker-vs-Worker Conflict... Memory Boom Golden Time at Risk
The problem is that production disruptions caused by labor-vs-labor conflict could spread to the entire global AI semiconductor supply chain. In particular, paralysis at the TSP division, which handles packaging, is fatal at a time when Samsung is engaged in a fierce battle for leadership in fine processes and advanced packaging with competitors such as TSMC. Another source warned, "It is a more important time than ever to meet delivery deadlines for high-bandwidth memory (HBM) loaded onto Nvidia's AI graphics processing units (GPUs)," adding, "If work negligence on production and verification lines continues, the trust relationship with customers will collapse and meeting delivery deadlines could become difficult."
While Samsung Electronics is held back by internal conflict, the global memory market is entering an unprecedented boom, as the trend shifts toward equipping not only AI GPUs but also central processing units (CPUs) with high-capacity memory. Recently, Nvidia CEO Jensen Huang and AMD CEO Lisa Su simultaneously announced expanded production of AI CPUs, demanding more HBM, general-purpose DRAM, and SoCAMM, a low-power DRAM for servers.
In particular, as Nvidia rolls out its AI CPU "Vera" and AI GPU "Rubin" in earnest in the second half of this year, demand for AI inference computing from North American cloud service providers (CSPs) is projected to surge 122% year-on-year. As the center of gravity of the AI market shifts from computation to inference, equipping CPUs with high-capacity memory has become essential. Accordingly, a record-breaking "DRAM bonanza" is expected in the semiconductor market in the second half.
Ultimately, observers point out that Samsung Electronics urgently needs to swiftly mend the internal bonus conflict in order to absorb the explosive AI demand from global Big Tech firms and lead the high-value-added market. In particular, with the entire semiconductor back-end (packaging and testing) supply chain experiencing severe shortages, missing the golden time due to internal turmoil would inevitably leave the company isolated in the global competitive landscape.
An industry source emphasized, "It is an emergency situation in which competitors abroad are staking everything on capacity expansion and equipment procurement," adding, "It is time for Samsung Electronics to quickly resolve internal conflict and reconsolidate company-wide capabilities to enhance external competitiveness."
