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Apple trapped in China, Samsung constrained by unions

Published: 27 Mar. 2026, 00:02

Park Su-ryon

The author is the deputy editor of Content Division Three and the head of corporate research at the JoongAng Ilbo.

Apple will mark its 50th anniversary on April 1. The company is long associated with the slogan “Think different,” distinctive design, technological sophistication and an almost obsessive pursuit of perfection. Recently, however, another label has been added: a U.S. company deeply dependent on China.

Apple CEO Tim Cook, left, tours a Foxconn iPhone 6 production facility in Zhengzhou, China, in October 2014. [SCREEN CAPTURE]

Since the 1990s, when co-founder Steve Jobs was still alive, Apple has built production bases across Taiwan and China. The strategy was to exert tight control over every stage of manufacturing. Apple even purchased equipment for its contractors and trained a highly disciplined work force in the Chinese-speaking world. As described in “Apple in China” (2025) by Patrick McGee, this system relied on China’s dense supply chains and labor conditions often described as social dumping.

Within that manufacturing ecosystem, Apple was able to maintain operating margins in the 30 to 40 percent range. The business model, which does not require sharing significant profits with subcontracted labor, has been a key factor behind those margins, often cited in comparisons with Samsung Electronics.

But that era may be ending. As the United States and China decouple economically, Apple is seeking to shift parts of its production to India, Vietnam and even the United States to reduce geopolitical risks. Yet no alternative fully matches China’s combination of efficiency and skilled labor, suggesting Apple’s future remains closely tied to the country.

While Apple faces constraints in China, Samsung Electronics is confronting a different challenge at home: labor relations. The company, which didn't have a labor union until 2018 after nearly five decades of operation, is now dealing with increasingly assertive union activity.

Samsung’s union staged its first-ever general strike in 2024. This year, with unionization in the semiconductor division nearing 70 percent, it has called for another strike in May. In both cases, the central issue has been performance-based bonuses. With memory chip prices rising, a strike could lead to production disruptions and losses estimated at more than 5 trillion won ($3.4 billion).

The union is demanding that 20 percent of last year’s operating profit be distributed as bonuses, compared with 10 percent at SK hynix. That would translate into about 450 million won per employee in the memory division and 300 million won in nonmemory units. The union has rejected differentiated payouts based on individual performance or stock-based compensation, insisting on cash.

Samsung management bears part of the responsibility. For decades, the company distributed annual cash bonuses tied to short-term performance. Only after the end of its union-free era did it begin to consider compensation systems aligning long-term corporate growth with employee interests. The reliance on short-term incentives has also been cited as a factor in Samsung’s difficulty retaining global talent.

In the current negotiations, the union is likely to hold the upper hand. Competition for semiconductor talent has intensified, with firms such as Nvidia and Tesla recruiting engineers with expertise in memory chips. Just as Apple cannot easily exit China, Samsung cannot sustain growth without cooperation from its work force in Korea.

A press conference announcing a strike by the National Samsung Electronics Union is held in front of Samsung Electronics’ Seocho headquarters in Seoul on the morning of May 29, 2024. It marked the union’s first-ever strike. The union has also announced plans for another strike in May. [YONHAP]

Still, semiconductor unions should recognize a broader context. Bonus disputes at private firms have drawn nationwide attention because the semiconductor industry is considered a strategic pillar of Korea’s economy.

Successive governments have supported the sector as both a major export driver and a core national technology. A semiconductor support law passed in January expanded tax incentives for investment and encouraged central and local governments to help build industry clusters. The administration of President Lee Jae Myung has also explored relocating fabrication plants beyond the capital region to spread economic benefits, though public concerns persist about potential impacts on competitiveness.

The industry’s achievements have not been driven solely by corporate effort. They reflect sustained public support and policy backing. Against that backdrop, union demands framed as avoiding multitrillion-won losses risk prompting frustration among shareholders and the broader public.

Resolving such disputes swiftly and quietly may be the most effective way to preserve both competitiveness and public trust.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.