South Korean Samsung union prepares for indefinite strike, threatens production of critical components

Samsung Electronics Co.’s union of more than 28,000 workers has launched an indefinite strike, posing a major threat to the production capacity of the world’s largest memory chipmaker.

The strike, which began as a three-day walkout to demand better wages, has become the largest organized labor action in Samsung’s history. Thousands of workers gathered outside Samsung’s chip manufacturing facilities near Seoul, marking a dramatic clash with Korea’s largest company.

In response to the strike, Samsung management has been accused by the union of avoiding dialogue and escalating tensions. The union has warned of disruptions in the production chain of critical components, saying management will eventually be forced to resume negotiations.

Samsung shares in Seoul edged lower after the strike was announced, reflecting concerns about potential production disruptions. While much of Samsung’s production is automated, any disruption could impact critical operations, especially as the company seeks partnerships like the one with NVIDIA Corp. for high-bandwidth memory, essential to compete on AI technologies against rivals like SK Hynix Inc.

Preparations for the strike have been intense, with the union preparing for weeks after negotiations over wages and leave broke down last month. The move marks a significant escalation from a brief one-day strike in June, which was unprecedented in Samsung’s 55-year history.

The union’s strategy aims to amplify their demands by directly affecting production at Samsung’s advanced chip facilities. Simultaneously, the strike coincides with Samsung’s major product launch event in Paris, where the company is expected to unveil new foldable phones and wearables with artificial intelligence and innovative health-tracking features.

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