Thousands of Samsung employees strike in Korea
For months, Samsung and Korean labor unions have been unable to come to an agreement on new wage contracts. Over 5200 employees have consequently gone on strike in protest. This historic step could have global consequences for the company.
Thousands of Samsung employees took to the streets in protest after failed wage negotiations. "Today's general strike is just the beginning," declared union chief Son Woo Mok. The strike is expected to last three days and could have significant impacts on the economically significant production of high-end memory chips.
Thousands of female and male employees gathered in black raincoats and with bands bearing the slogan "Fight with Solidarity" in front of the company's factory in Hwaseong, south of Seoul. The union reported that approximately 5200 people had joined the protest.
"Does management still believe that this will have no effect on the production line?" questioned Lee Hyun Kuk, Vice President of the union. "I'm very excited," said a union member, refusing to name himself. "We're making history."
Historic strike in June escalates
The management of the tech giant has been in negotiations with the National Samsung Electronics Unions since January. However, they have yet to reach an agreement. The company's offer of a 5.1% wage increase was rejected by the union, which also demanded improvements in annual leave and transparency in performance-based bonuses.
The union, which represents around 30,000 members - more than half of the company's entire workforce - had announced a three-day strike in the previous week. Employees had previously gone on strike for one day in June, marking the first time in the company's history.
Company spokespersons had initially remained silent regarding the impact on production, although observers saw significant symbolic value in the one-day strike in June. Samsung had successfully resisted any labor union organization of its employees for decades.
Chipmakers on strike
Economist Kim Dae Jong of Sejong University now warns that participants in the three-day strike, which began on Monday, include those who work "on the chip production lines." With the union's ability to extend the strike, this could pose "a significant risk for Samsung management in the midst of their race for dominance in the intensely competitive chip market," he explained.
The company itself has yet to comment. Samsung Electronics is the world's largest producer of memory chips and a significant contributor to global production of high-end semiconductors. It is also the most important subsidiary of the Samsung Group, the largest family conglomerate in Asia and the fourth-largest economy in the world.
Semiconductors are South Korea's most important export good
Thanks to the recovery of chip prices and increased demand for products related to Artificial Intelligence, the company announced last week that it expected a 15-fold increase in profits for the second quarter compared to the previous year.
Semiconductors have become the cornerstone of the global economy and are used in various products - from household appliances to mobile phones, cars, and weapons. At the same time, chips are South Korea's most important export commodity and earned the country 11.7 billion US dollars in March, the highest level since nearly two years. This corresponds to about a fifth of the country's total exports.
The strikes by Samsung employees, including those in the chip production lines, could disrupt the company's dominant position in the intense chip market. The union's demand for improvements in wage negotiations, annual leave, and transparency in performance-based bonuses could have significant consequences for Samsung Electronics, the world's largest producer of memory chips. The striking workers, who represent more than half of Samsung's workforce, are contributing to South Korea's record-breaking export of semiconductors, a critical component in various industries driven by Artificial Intelligence.
