Samsung Reportedly Raises Chip Spin-Off Amid Strike Threat

Samsung Electronics has reportedly raised the possibility of a corporate split with the government as management grapples with mounting labor pressure and widening profit disparities across its businesses. Government and industry sources said a senior company official recently discussed separating the semiconductor operation from the TV and home-appliance units, a move that would leave the chip business as a standalone company while carving out consumer businesses that have been under pressure from Chinese rivals.

The report said the issue has resurfaced as union tensions centered on the Device Solutions semiconductor division intensify. Samsung’s union is demanding performance pay equal to 15% of this year’s operating profit, estimated at about 45 trillion won, and has declared a general strike beginning on May 21. Samsung is also said to be reviewing restructuring of its Device eXperience division, though a full spin-off is viewed as difficult because of potential damage to shareholder value, likely backlash from its 4 million to 5 million shareholders and legal hurdles.