A coalition of Samsung Electronics workers has announced the first strike in the history of the South Korean technology giant after negotiations over wage increases failed.

The union plans to use a collective paid leave day for its members on June 7th as a first step towards a possible comprehensive strike. "We can no longer tolerate the oppression of workers and unions. We declare a strike in light of the management’s attitude of ignoring the workers," read a banner held by members of the National Samsung Electronics Union on Wednesday.

A spokeswoman for Samsung Electronics said the company had no comment on the union's recent statement.

Since January, the National Samsung Electronics Union and Samsung Electronics management have held several rounds of negotiations but have been unable to reach an agreement. The union claims to have around 28,000 members, which is approximately one-fifth of the company's entire workforce.

After the strike plans became known, Samsung shares fell by 3.1% and closed at 75,200 won (55.14 USD) in Seoul.

Should the strike actually take place, it would be the first strike by workers at Samsung Electronics. Moreover, the strike would come at a challenging time for the world's largest memory chip manufacturer, as it tries to expand its semiconductor business amid growing demand for advanced chips in the wake of the AI boom.

Last week, Samsung replaced the head of its semiconductor business after falling behind in the race to develop high-speed memory chips, a critical component for AI and high-performance components. The company described the leadership change as a "preventive measure" to strengthen competitiveness.

Last month, Samsung reported more than quadrupled net profit in the first quarter, as its core semiconductor business became profitable again due to a rise in memory chip prices. This indicated that the global technology sector is recovering from a prolonged slump.

Despite increased investments, Samsung has experienced a decline in its share of the global foundry business – manufacturing chips designed by others – in recent years. The Taiwanese industry leader TSMC has increased its share of the global foundry market from 50% in 2019 to 59% in 2023, according to estimates from CLSA. During the same period, Samsung's market share fell from 18% to 12%.

To counteract this, South Korea last week unveiled a support package worth 19 billion USD to help domestic chip manufacturers narrow the gap with other leading players.