Samsungs Semiconductor Schism Is Renting Its Labor Force apart

Two Companies, One Balance Sheet

On a late August afternoon in Seoul’s Seocho district, roughly 2,000 Samsung workers marched toward the company’s headquarters carrying coffins labeled DX. The props were deliberate. The message was unambiguous: non-semiconductor employees at the world’s largest chipmaker feel buried alive by a compensation system that treats their division as a second-class operation inside a first-class company.

The Donghaeng union, representing Samsung’s Device eXperience division responsible for smartphones and home appliances, is demanding 1,000 shares per employee, the nullification of the current wage agreement, and genuine renegotiation. Their grievance centers on a structural pay gap that has widened into something resembling a corporate caste system. Samsung’s own management acknowledged in an August 19 briefing at the Suwon facility that DX and DS operate as de facto separate entities — different HR, different finance, different accounting — a arrangement in place since 2009.

The company’s explanation was essentially: this has always been the model, so the gap is justified. DX workers heard something else entirely. They heard confirmation that they have been managed as an internal cost center while the semiconductor division has been treated as the crown jewel.

The Math Behind the March

Samsung’s argument during the August 19 session included a detail that likely did nothing to calm restless DX members. The company stated that during the recent semiconductor downturn, the Mobile eXperience division actually transferred funds to the DS division and has since recouped those payments with interest. In other words, when DS needed support, DX subsidised it. When conditions improved, DX was reimbursed. The logic is clean on paper and deeply alienating in practice.

It tells workers in one division that they are financially responsible for propping up another division that now enjoys materially better compensation — and that the company views that arrangement as fair.

The specific demand for 1,000 shares per employee carries symbolic weight as much as financial weight. For context, Samsung’s ordinary share price has traded in the range of approximately 50,000 to 70,000 won in recent years, making the total nominal value of the request roughly 50 to 70 million won per worker — equivalent to a substantial portion of annual compensation. Whether Samsung will pay that price or simply refuse and escalate is the central question.

The Fracture Between Unions

What makes this dispute structurally significant is that it is no longer just a conflict between workers and management. It is also a conflict between two unions that previously operated as allies.

The Korea Industrial Council-affiliated union for Samsung Electronics, which holds the majority of DS members, sent a formal letter to Donghaeng on August 20 stating it would not form a joint bargaining unit for 2027 negotiations. Instead, the industrial union plans to focus exclusively on improving conditions within the DS division, which includes system LSI and foundry operations. The company’s own position — that DX and DS have materially different business performance and working conditions — is being cited as justification for separating the bargaining tables entirely.

The industrial union has also requested that the Labor Relations Commission formally approve division-specific negotiations. A ruling would require the commission to find that the two divisions differ significantly in working conditions, employment structure, and existing bargaining practices. That is a high bar, and it is not guaranteed.

But the threat alone changes the landscape. Samsung’s labor movement has historically operated through coordinated action across divisions. If that coordination breaks down — and the current trajectory suggests it will — Samsung loses its most powerful defensive mechanism against union demands: a unified labor front.

Who Wins, Who Loses

If Donghaeng secures 1,000 shares per member, it sets a precedent that could force Samsung to restructure its entire compensation philosophy. The company’s segment-based accounting model, which has allowed it to treat DS as a profit center and DX as a cost center, would face immediate pressure to change. Competitors and other chaebols with multi-division structures would watch closely.

If Samsung refuses and the labor commission rejects separate negotiations, the current dynamic persists. DX workers remain structurally disadvantaged within the company’s internal economy. The coffin imagery from the August 21 protest would lose its potency but not its underlying truth.

If the labor commission approves separate bargaining, Samsung’s semiconductor division gains a powerful new ally in its own workforce — one with little incentive to support DX demands. That is the most likely outcome from Samsung’s perspective and the most damaging for Donghaeng. It would institutionalise the very inequality the march was protesting.

For Donghaeng, the risk is real but the alternative is worse. Walking away from the current agreement without a fight signals that the non-semiconductor half of Samsung’s business exists at a permanent disadvantage. That message, if internalised across the workforce, could accelerate talent drain from DX to DS or to rival employers like LG and SK Hynix — or out of Samsung entirely.

What Happens Next

The immediate timeline runs through the Labor Relations Commission’s decision on whether to grant division-specific negotiations. That ruling will determine whether 2027 bargaining happens as one unified process or two parallel ones. If separate bargaining is approved, Donghaeng’s leverage diminishes substantially. If denied, the current joint framework continues and the share demand stays on the table.

Samsung’s management has made its position clear: the segment-based model is intentional and here to stay. But intention is not the same as permanence. Labour movements in Korea have a history of forcing structural concessions from chaebols, and the current moment — with semiconductor profits at cycle highs and DX facing margin pressure from smartphone saturation — creates exactly the kind of asymmetry that drives labor unrest.

The coffins on display in Seocho were never meant to be literal. They were a metaphor for what DX workers believe is happening to their careers, their compensation, and their standing inside the company they helped build. Whether Samsung treats that metaphor as theatrical grievance or as a signal of genuine organizational fracture will define the next chapter of Korean labor relations at the country’s most important corporation.