This past week, Samsung avoided the worst situation since the start of its semiconductor and AI business, and the effect of this escalation could have expanded through the global supply chain.

The whole story starts with the Samsung Device Solution (DS) division showing disappointment with their bonuses and the management. They asked for higher stakes in the profit, which is skyrocketing on the back of the booming AI industry and chip demand.

In the backdrop, Samsung management and its labor union have been locked in a deep conversation for almost a year. After no fruitful outcome, the union announced to host a strike, and planned to carry it for 18-days. Throughout this time, the company was expected to lose billions of dollars.

However, Samsung management and the labor union agreed to a resolution just an hour before the strike.

What’s the deal

Samsung has agreed to distribute 10.5% of its AI chip division’s operating profit in the form of stocks. However, the agreement between the two will be based on the target. The division must achieve an annual operating profit of no less than 200 trillion won (around $132 billion) between 2026 and 2028, and no less than 100 trillion won ($66 billion) from 2029 to 2035.

According to the business forecast, Samsung’s operating profit could touch 300 trillion won (approximately $200 billion). Translating into the bonus payout, it will account for 600 million won (approximately $400,000) in bonuses for each of the AI chip business employees.

On the other hand, the Foundry and System LSI divisions, which are operating at a loss, will also receive around 160 million won ($100,000) in bonuses. However, Samsung’s DX unit employees are excluded from the performance bonuses, and they only receive 6 million won ($4,000) of stock value.

That said, the DX division employees are now planning to take Samsung to court over the exclusion from the bonus negotiations.

Crisis avoided

Besides Samsung’s own loss, this situation could have created a big problem in the semiconductor industry as the company fulfills a huge demand of global customers for HBM and DRAM. Halting the supplies even for a week would create turmoil in the supply chain that could disrupt the entire industry.

Striking this deal is a big relief for the Samsung Electronics division and its future business goals.

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A few days ago, Samsung announced HBM4E sample shipment, a new high-bandwidth memory with massive speed gains and improved performance; in other words, this is a new money maker AI chip for the South Korean semiconductor firm.

HBM4E surpasses the initial HBM4 in different statistics, including 14Gbps stable in speed, performance increase up to 16Gbps for data processing. These numbers reflect up to 20% increase in performance over HBM4 introduced in February. The new AI chip delivers 3.6 TB/s memory bandwidth per stack for intensive computing for large language models (LLMs) and next-gen AI systems.

The initial version comes with 48GB (12-layer) capacity, a 30% increase over the last generation. The memory maker has a plan to add two other variants, a 32GB (8-layer) and 64GB (16-layer), based on customer demand.

This chip uses a low-power design with upto 16% energy efficiency and up to 14% thermal resistance than the previous generation.

The roadmap unfolded by HBM4’s mass production and industry success has led to the new chip, which will also enter the production line based on customer feedback for early samples.

Profit boom

This year brought the best business Samsung has ever recorded, thanks to the AI-chip boom. Its Q1 2026 result shows that Samsung posted KRW 133.9 trillion in revenue with a 43% quarter on quarter increase.

In other words, Samsung’s memory division posted an all-time high quarterly revenue. On the other hand, the KRW 53.7 trillion has been marked in operating profits, which is the highest the company has ever posted.

In Q1, the company became the second-largest semiconductor company in terms of operating profit, after Nvidia, which recorded around KRW 66 trillion. The sales doubled in the first quarter, and the operating profit saw more than a threefold increase.

Samsung said there are two reasons behind this rapid business increase. First is the HBM demand by key AI players, and the other is DRAM prices, which jumped up to 90% through past 12 months.

Besides, HBM4, the HBM4E is likely to get even more attention with its increased performance, which is necessary for the next-gen AI chips produced by the likes of Nvidia and AMD.

Samsung is expected to make new earnings records through 2026.

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