SEOUL, May 19 (Reuters) - South Korean memory chip maker

Samsung Electronics ( SSNLF ) is facing its worst-ever strike,

with nearly 48,000 workers threatening to walk off production

lines on Thursday for 18 days over a dispute about bonus

payouts.

Here are key things to know:

WHAT DOES SAMSUNG'S UNION WANT?

Samsung's union has asked the company to abolish a cap that

limits bonuses to 50% of annual salaries and to allocate 15% of

annual operating profit to a bonus pool that would be

distributed to workers. It also wants Samsung to make the

changes binding beyond this year.

Samsung made a very different offer.

Transcripts of negotiations between the union and Samsung

showed that in March, Samsung cited estimates that some staff at

smaller rival SK Hynix could receive bonuses

equivalent to 607% of their annual salary and proposed that its

memory chip workers would gain a bonus exceeding levels that SK

Hynix workers receive.

Samsung also proposed bonuses of 50% to 100% for staff in

its logic chip businesses.

These bonuses, however, would be a one-off payment for this

year. In principle, it does not want to abolish the cap on

bonuses at 50% of annual salaries.

WHAT IS DRIVING THIS?

Samsung and SK Hynix have seen profits balloon to record

highs thanks to a global shortage of memory chips amid the boom

in artificial intelligence. The two companies account for the

majority of global memory production.

Last year, SK Hynix abolished its cap on bonus pay for 10

years, media reports said. This resulted in bonuses more than

three times ​higher than those offered to Samsung workers,

prompting many to jump ship for SK Hynix and sparking a surge in

union membership, according to Samsung's union.

HOW MIGHT THE STRIKE PLAY OUT?

The strike promises to be far larger and more damaging than

the last walkout to affect Samsung in 2024, when about 6,000

workers took part.

Samsung's union says that nearly 48,000 employees, the

majority of them chip workers, have signed up to participate.

That represents 38% of Samsung Electronics' ( SSNLF ) domestic work force.

A court on Monday partially granted Samsung's request for an

injunction, ruling that essential staffing levels at some

production facilities must be maintained during any industrial

action. Samsung has notified the union that this will require

7,087 workers to report for work even if the strike goes ahead.

The company's chip factories in South Korea operate 24 hours

a day across three shifts in locations such as Pyeongtaek and

Hwaseong.

WHY IS THIS STRIKE CAUSING SUCH CONCERN?

The strike threatens to dent the supply of memory chips at a

time of severe shortages.

Samsung is the world's largest maker of DRAM chips,

commanding 36% of the market as of the end of last year,

according to research firm TrendForce. Memory chips, key

components in laptops and smartphones, have become essential

building blocks for AI data centres.

KB Securities analyst Jeff Kim has estimated that an 18-day

strike could disrupt global supplies of DRAM memory by 3% to 4%

and NAND memory by 2% to 3%, which would likely fuel further

price increases.

South Korean government officials have also warned about the

impact of a strike as Samsung accounts for nearly a quarter of

Korea's exports.

An official at South Korea's central bank has said that a

strike could, in a worst-case scenario, shave 0.5 percentage

points off a forecast 2.0% expansion in the South Korean economy

this year.

This assumes that around 30 trillion won ($19.9 billion) of

chip production could be lost and that there might be an

additional "few weeks" of disruption to production, the person

said.

($1 = 1,505.9000 won)