Samsung Electronics Co.’s unionized workers in South Korea have initiated an indefinite strike, demanding higher pay. This labor action goes beyond just salaries—it could significantly affect the global memory chip market.

The National Samsung Electronics Union, representing around 31,000 workers, has declared an indefinite strike. These workers make up nearly a quarter of Samsung Electronics’ vast workforce. The strike follows the company’s leadership’s refusal to negotiate during a three-day walkout by some union members. With over 5,000 workers from Samsung’s semiconductor division participating, the strike threatens to disrupt production.

Samsung is the leading global manufacturer of memory chips, essential components in computers, smartphones, and servers. The company controls 45.5% of the global DRAM chip market and 36.6% of the NAND Flash memory chip market. These chips are crucial for data storage and processing, making them vital for modern technology.

As artificial intelligence (AI) continues to transform industries, the demand for memory chips has surged. Samsung’s efforts to secure approval from AI leader Nvidia for its latest High Bandwidth Memory chips (HBM3e) have encountered obstacles. Nvidia’s CEO, Jensen Huang, indicated that further engineering work is necessary. Despite most of Samsung’s HBM manufacturing being automated, any strike-related disruptions could affect the company’s chances of becoming Nvidia’s preferred memory chip supplier, potentially giving an advantage to rival SK Hynix.

The strike comes at a critical time for the tech industry, where memory chips are in high demand due to the ongoing AI revolution. Any significant production delays could exacerbate global supply chain issues, affecting everything from consumer electronics to advanced computing systems. Companies dependent on steady chip supplies are likely to feel the pressure, which could lead to price fluctuations and potential shortages.

Samsung’s union strike represents a pivotal moment in the technology sector. As negotiations continue, the global memory chip industry remains on alert, understanding that even localized labor actions can have widespread effects on markets worldwide. The outcome of this strike will be closely monitored by industry stakeholders, highlighting the interconnected nature of global supply chains and labor relations.