The National Samsung Electronics Union in South Korea has declared a strike, demanding higher wages and fair treatment. This is the first time in the company’s history that its workers have taken such action.

What Happened: The NSEU, which represents over a fifth of Samsung Electronics ( SSNLF ) workforce, is set to initiate a one-day strike on Jun. 7, Reuters reported. The union has been vocal about its demands for increased wages, an additional day of annual leave, and transparent performance-based bonuses.

The decision to strike comes after the company announced a 5.1% wage increase for this year. The union claims that Samsung Electronics ( SSNLF ) has not presented a compromise plan during the negotiations held the day before the strike announcement.

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Union president Son Woo-mok defended the decision, stating that the company’s ongoing crisis should not be used as an excuse to ignore the workers’ demands. The strike is expected to impact all of Samsung’s sites across South Korea. “The company has been saying they are facing crisis all along for the past 10 year,” he said.

 “We will sincerely engage in discussions with the union,” Samsun said on Wednesday.

Why It Matters: The strike comes at a crucial time for Samsung Electronics ( SSNLF ), which has been facing challenges in its AI chip efforts. Earlier in May, Nvidia‘s evaluation revealed heat and power consumption issues with Samsung’s AI chips, posing a significant setback for the company.

Amid this crisis, Samsung appointed a new semiconductor chief to navigate the challenges and capitalize on the AI boom. However, the union’s decision to strike reflects the growing frustration among workers due to the company’s slump in competitiveness and legal issues, according to analysts.

Meanwhile, Samsung’s rival SK Hynix has seen a surge in demand for AI chips, leading to its first profit in five quarters. This has added to the pressure on Samsung, which has been dominant in the semiconductor industry alongside SK Hynix.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote