Samsung Electronics Union announces first-ever strike

A major union representing tens of thousands of people at South Korean tech giant Samsung Electronics said Wednesday that workers would go on strike for the first time, potentially threatening key global semiconductor supply chains.

A spokesperson said union members, around 20 per cent of the company’s workforce, would use their annual leave to strike for a day on June 7, leaving the door open for a possible general strike at ‘future.

Samsung Electronics is one of the world’s largest smartphone manufacturers and also one of the only companies in the world producing high-end memory chips used for generative AI, including high-end AI hardware from from industry leaders such as Nvidia.

Management at the company, the world’s largest producer of memory chips, has been engaged in negotiations with the union since January over wages, but the two sides have failed to narrow their differences.

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“We are declaring a strike over the company’s neglect of workers,” the national electronics union Samsung said in a live-streamed news conference.

“We tried to resolve the problem through dialogue,” said the union, which represents more than 28,000 people.

“The responsibility for any collective action now rests with the company. We state our position regarding the company’s negligence and interference in our peaceful struggle thus far,” it adds.

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If the strike continues, it would be the first-ever strike by workers at the South Korean tech giant.

Union president Son Woo-mok said the union had accepted the company’s proposed pay increase but was demanding additional leave as well as a “transparent system for measuring performance bonus based on sales profit “.

“The company has not heard us or communicated since our last negotiating session,” he said.

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A company official told AFP: “Samsung will continue the dialogue with the union as it has done so far.”

Samsung Electronics is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-owned conglomerates that dominate business in Asia’s fourth-largest economy.

For nearly 50 years, Samsung Electronics avoided unionizing its employees — sometimes adopting cutthroat tactics, critics say — while becoming the world’s largest maker of smartphones and semiconductors.

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Samsung founder Lee Byung-chul, who died in 1987, was adamantly opposed to unions, saying he would never allow them “until I get dirt on my eyes.”

Internal documents from 2012 obtained by a South Korean lawmaker ordered managers to control “problem personnel” seeking to form unions.

“To avoid allegations of unfair labor practices, fire key organizers before forming a union,” it reads, among other recommendations.

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But in 2019, organizers seized the opportunity presented by the left-wing government of President Moon Jae-in — a former human rights lawyer who represented unions — and the controversy surrounding the vice corruption trial. -company president Lee Jae-yong, the founder’s grandson, to create a union.

“Having 20 percent of its workforce on strike will have a significant impact on the company as a whole, especially at a time when it must act quickly in the ever-changing semiconductor industry,” Kim said Dae-jong, professor of business at Sejong University.

“Unlike Hyundai Motor, which faces strikes almost every year, Samsung management will find it difficult to control this situation because it has never had to deal with a strike before,” he added.

The union said that as a first step, it would strike for one day only on June 7 and use its annual leave.

“This could lead to a general strike,” a union spokesperson said, adding that it was still “the company’s first strike (and) we believe it is significant.”

Semiconductors are the lifeblood of the global economy, used in everything from kitchen appliances and cell phones to cars and weapons.

And demand for the advanced chips that power AI systems has soared thanks to the success of ChatGPT and other generative AI products.

Semiconductors are South Korea’s top export and reached $11.7 billion in March, their highest level in nearly two years, accounting for a fifth of South Korea’s total exports, according to data. figures published by the Ministry of Commerce.