Just Break Up Samsung Electronics

Samsung Electronics must be broken up.

The structural limits of a company that stands above the nation, and the need to break it up.

The labor dispute at Samsung Electronics should not be read as a mere wage negotiation.

Strike, or a dramatic last-minute deal? Samsung Electronics' labor and management kept up post-mediation talks at the National Labor Relations Commission until the day before the announced general strike. The union announced an 18-day general strike from May 21 to June 7, involving roughly 50,000 workers. The core issue is the funding and distribution method of performance bonuses. Labor and management clashed over what percentage of operating profit to set aside as the bonus pool, and how to divide that pool within DS.

This scene cannot be fully explained by the phrase "labor-management conflict."

What has erupted now is not an internal wage problem at Samsung Electronics. It is a structural problem of the Korean economy leaning far too heavily on a single mega-corporation.

While Memory Rakes in the Money, the Other Businesses Are Under Pressure

In the first quarter of 2026, Samsung Electronics posted consolidated revenue of 133.9 trillion won and operating profit of 57.2 trillion won. Of that, the DS division—semiconductors—accounted for 53.7 trillion won in operating profit. In other words, semiconductors earned almost all of the total operating profit. Expanding sales of high-value AI products and rising memory prices pushed the results up.

Meanwhile DX—the consumer business centered on smartphones, TVs, and home appliances—made 3 trillion won in operating profit in the same quarter, but is simultaneously squeezed by cost burdens, tariff effects, and rising memory prices. The official earnings materials also explain that the improvement in home-appliance results was limited by rising costs and tariff effects.

Within the same Samsung Electronics, one side reaps the benefits of the AI memory supercycle, while the other shoulders those risen component prices as a cost.

This structure is the backdrop to the bonus conflict.

DS says, "We earned it." DX says, "We held the line during the semiconductor downturn." Even within DS, the interests of memory and non-memory diverge. The actual negotiation issue, too, came down to whether the DS special bonus pool should be distributed according to the performance of individual sub-divisions, or spread more broadly and uniformly across all DS members. There was even debate over whether it is right for the currently loss-making non-memory division to receive a large bonus simply because it belongs to the same DS.

So the essence of this fight is not a few percentage points of bonus.

The problem is the very structure of binding such different businesses inside a single corporation.

Samsung Electronics Is Not a Company—It's a Systemic Risk

In finance there is a concept of systemically important financial institutions. Global systemically important banks, or G-SIBs, are classified as institutions whose failure could shock the entire financial system, and they are subject to higher capital requirements and supervisory standards.

Apply this logic to manufacturing, and Samsung Electronics is a Korean-style industrial SIFI.

The fact that the semiconductor cycle shakes Korea's exports and its entire financial market is no longer news. The KDI, too, recently assessed the Korean economy by stating that strong semiconductor exports are driving export growth. The earnings, stock prices, and investment plans of Samsung Electronics and SK Hynix no longer stay within individual-company news. They have become indicators that explain the direction of the Korean economy.

That is why the possibility of a Samsung Electronics general strike is not a simple internal corporate event.

The union announced an 18-day general strike, and analysts predicted that if participation reaches 30,000 to 40,000 people, the production disruption could be larger than the 2024 strike. According to Yonhap News, when post-mediation talks broke down on May 13, even the possibility of the government invoking its emergency arbitration power was raised.

A structure in which one company's internal compensation system spills over into national industrial policy, exports, the stock market, and supply-chain risk.

This is not a problem caused by Samsung being a bad company. Quite the opposite. It is a problem that arises precisely because Samsung Electronics has grown too big and packed too many functions into a single body.

A single corporation holds memory, foundry, System LSI, smartphones, TVs, home appliances, networks, and even Harman. Their business cycles differ, their investment logics differ, their customers differ, their talent markets differ. And yet there is just one corporation. Bonuses, labor negotiations, shareholder value, and national risk all end up bound under the single name "Samsung Electronics."

The time to treat this structure as a given has passed.

This Isn't Antitrust—It's a Problem of National-Economy Concentration Risk

It is not easy to touch Samsung Electronics with conventional antitrust logic.

Memory competes with SK Hynix and Micron. Foundry competes with TSMC. Smartphones compete with Apple, Xiaomi, Oppo, and Vivo. TVs and home appliances are also global competitive markets. It is hard to simply claim that Samsung Electronics is abusing a monopolistic position in any particular market.

So the frame we need is not antitrust.

It is national-economy concentration risk.

The breakup of AT&T in the United States was an antitrust case, but behind it was the public-interest problem of a single company controlling the key bottleneck of the nation's telecom infrastructure. The U.S. courts and Department of Justice ultimately carried out a large-scale structural separation, including the spin-off of the regional telephone businesses, and in 1984 the so-called Baby Bell system was born.

This is not to say we should apply the exact same legal doctrine to Samsung Electronics right away.

But the question remains.

When the core risk of a national strategic industry is amplified into the internal conflict of a single corporation, how far should the state keep its hands off?

The current Fair Trade Act alone makes it hard to deal adequately with this problem. Because this is not market monopoly but national-economy concentration risk. If so, a new institution is needed. We need a separate legislative discussion that, for industry-critical companies above a certain scale, could weigh division-by-division risk, labor structure, supply-chain impact, and national-economy ripple effects, and recommend or order structural separation or governance reform.

This is not corporate bashing.

It is building a firewall for the national economy.

Breaking It Up Is How It Gets Stronger

Saying we should break up Samsung Electronics does not mean making Samsung weaker.

Quite the opposite.

A memory semiconductor company could focus on the AI memory supercycle. It could concentrate capital and talent on massive capital expenditure, HBM, next-generation memory, and meeting data-center demand.

The foundry could raise customer trust when spun off as a separate company. As it stands, with the foundry sitting inside the giant finished-goods-and-memory company that is Samsung Electronics, a subtle tension arises from a potential customer's point of view. Customers like Apple, Nvidia, and Qualcomm cannot help being sensitive about their designs and strategies entering a competitor's ecosystem. An independent foundry structure could ease this problem.

The smartphone and home-appliance company could become an independent consumer-brand company. Rather than an internal parts buyer tossed around by the semiconductor price cycle, it would become a company evaluated on product strength, brand, service, and operational efficiency in the global consumer market.

Labor compensation would become clearer too.

Each company would be evaluated on its own performance. Internal wars—over who divides the money memory earned, over who held the line when DX was struggling, over how to bundle memory and foundry within DS—would diminish.

Shareholders could make clearer choices too. Those who want to invest in AI memory, those who want to bet on a foundry turnaround, and those who want to buy the cash flow of a consumer-brand company could each choose for themselves.

Today's Samsung Electronics crams too many investment theses into a single stock.

As a result, good businesses don't get their fair value, and struggling businesses can't get proper surgery either.

Of Course It Won't Be Easy

A breakup is not as simple as it sounds.

Going the asset-spin-off route could provoke fierce backlash from existing shareholders. An equity spin-off requires weighing governance, taxes, the listing structure, and the reaction of foreign investors all at once. Appraisal rights, creditor protection, employment succession, patents and licenses, internal transactions, and the restructuring of overseas subsidiaries—astronomically difficult problems all follow.

Samsung Electronics, in particular, is no ordinary company. The breakup itself would become a market event, affecting the foreign-exchange market, the KOSPI, the National Pension Service, partner suppliers, and even regional economies.

So the claim that we should break it up overnight is irresponsible.

But "it's hard" and "we won't do it" are different things.

A careful roadmap is possible. First, separate the accounting and performance-compensation systems more transparently by division; then move toward strengthening the foundry's independence, separating the capital-allocation principles of memory and non-memory, and reinforcing a separate accountable-management system for DX. In the final stage, an equity spin-off, subsidiary listing, conversion to a holding company, or a separate industrial-holding model could be considered.

What matters is the direction.

The belief that "putting everything inside one corporation is stable" is no longer stable. On the contrary, when that single corporation wobbles, the entire Korean economy wobbles with it.

Samsung Electronics Is Building the Case for Its Own Breakup

This strike crisis has lifted the Samsung Electronics breakup debate from a peripheral idea to a central agenda.

It is not a question of whether the union is right or the company is right. Nor is it a question of whether 10% or 15% is the correct bonus.

The heart of it is this.

Inside a single corporation, too many different industries, too many different business cycles, too many different talent markets, and too many different compensation logics are bound together. So when internal conflict erupts, it does not end inside the company. It spreads into a risk for the entire national economy.

Saying Samsung Electronics must be broken up is not saying we should punish Samsung.

It is saying we should build a structure in which Samsung is evaluated more accurately, each business competes more independently, and the Korean economy is less vulnerable to the internal affairs of a single corporation.

There was a time when massive integration was strength.

Now that integration is becoming a risk.

Samsung Electronics is the pride of the Korean economy. But pride must not become an exception. If the pride has grown so large that it has become a bottleneck for the national economy, then we must redesign the structure precisely in order to keep that pride alive for a long time.

Breaking up Samsung is not making Samsung weaker.

It is ending an era in which the Korean economy is far too tightly bound to Samsung Electronics alone.