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Samsung starts winding down chip production six days before planned 18-day strike — company enters 'emergency management mode,' daily losses could hit $2 billion
The pre-strike adjustments, described as “emergency management mode," are designed to limit losses at facilities that normally operate around the clock. However, they also mean that Samsung's chip production is already declining days before the union's 18-day walkout is scheduled to begin on May 21st.
The process involves restricting how many new wafers are fed into production lines and changing the product mix to focus on higher-value chips like HBM and advanced node semiconductors, per a source reported by the Herald.
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This slowdown adds to a timeline of disruption that’ll extend well beyond the planned strike dates. KB Securities analyst Kim Dong-won estimated in a recent report that restarting and stabilizing Samsung's highly automated production lines after an 18-day stoppage could take an additional two to three weeks. Combined with this pre-strike wind-down period, Samsung's total window of reduced output could stretch to six weeks or longer.
According to the Seoul Economic Daily, daily losses could approach 3 trillion won ($2 billion) if fabrication lines are paused entirely. Professor Kwon Seok-joon at Sungkyunkwan University previously estimated that the 18-day walkout alone would cause 10 trillion to 17 trillion won ($17 billion) in direct losses, while JPMorgan has projected total losses of up to 43 trillion won ($28 billion) when factoring in labor costs and extended production disruption.
As of yesterday, May 14th, more than 43,000 workers had signed up to participate in the walkout, approaching the union's target of 50,000. "Even at the current level, more than half of the entire semiconductor (DS) division workforce is joining, and the company judges that a de facto shutdown is imminent,” a source told the Seoul Economic Daily.
Samsung sent a letter to the union today following the collapse of talks earlier this week, proposing that both sides resume talks without preconditions on Saturday, but union head Choi Seung-ho rejected the overture, telling Korean media that negotiations could take place after June 7, the scheduled end date of the strike.
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TrendForce projects that the strike could disrupt 3% to 4% of global DRAM supply and 2% to 3% of NAND supply, given Samsung's production share. The longer-term risk, however, may be reputational because Samsung is ramping up the supply of HBM and high-capacity server DRAM for AI infrastructure. Even brief delivery uncertainty could push customers toward SK hynix and Micron.
Luke 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.
Ok. I just don't understand the waiting till after the strike to negotiate. Isn't the strike your leverage in negotiations. You know, give us what we want or we will strike. Seems kind of backwards to me.
Situations like this are why companies are in a rush to implement robotics and AI to replace us.
Nah theyre trying to replace you regardless. They don’t care about you, you’re an expense on the budget sheet and they will get rid of you as soon as they determine it’s to their benefit. Oracle and Facebook employees didn’t strike. They still got fired en masse anyway.
Samsung is making an obscene amount of money through this AI windwall. The huge extra profit has nothing do with executive’s policies or management, it’s due to market conditions. Employees wanting a cut of this windfall that’s making their bosses huge amounts of extra money is only natural. Samsung, like basically all corps, is just greedy and doesn’t want to share any of the huge piles of free extra cash they’re getting. Well now they can have fun losing billions because of their greed.
That is the single best way to bring down memory RAM prices.
Produce less of the chips! That always works every time. Hey I have an idea. How about they just make zero chips and that will REALLY make prices collapse!
Since I want the lowest RAM prices that we have seen in years, I hope Hynix stops all production of RAM chips too. Yeah, that's it. We'll really get low prices then. No production anywhere.
And when Micron stopped all of its production? That was super beneficial, it made prices go down, it made my day.
Ok. I just don't understand the waiting till after the strike to negotiate. Isn't the strike your leverage in negotiations. You know, give us what we want or we will strike. Seems kind of backwards to me.
Oftentimes corp leaders don’t learn the lesson until they feel some pain.
Could you maybe just acknowledge that your wages are too garbage to upgrade your PC but you're too scared to do anything about it at your job? Because this projection has been going on for several posts related to this topic, and it's getting a little long on the tooth.
Samsung Electronics workers in South Korea, primarily through the Samsung Electronics Labour Union (SELU), are the ones striking. They see their rivals at SK Hynix making much larger bonuses even as Samsung sees massive gains in memory chip profits (due to AI demand).
That said, the average annual compensation for Samsung Electronics employees in South Korea was approximately 158 million South Korean won (KRW) in 2025, equivalent to roughly $107,300 USD.
Samsung is a South Korean founded and run company, with significant American operations.
I would like to see more companies like Samsung in the U.S. but with the stricter antitrust, higher regulatory costs, etc. it seems unlikely at this time. Perhaps the CHIPS Act might result in some more. Time will tell.
Could you maybe just acknowledge that your wages are too garbage to upgrade your PC but you're too scared to do anything about it at your job? Because this projection has been going on for several posts related to this topic, and it's getting a little long on the tooth.
It is a supply disruption.
This is going to make RAM prices go up.
It is very bizarre that people want to avoid that truth.
