Samsung Experiences Historic Worker Strike in South Korea

Samsung Electronics is experiencing its first strike in the tech giant's 55-year history in South Korea, with approximately 28,000 workers participating.

Negotiations between Samsung management and the Nationwide Samsung Electronics Union (NSEU) have reached an impasse primarily over pay and bonus arrangements. Despite efforts to resolve differences, the union proceeded with the strike, utilizing annual leave to express dissatisfaction. 

"We are declaring a strike in the face of the company’s neglect of laborers," a spokesperson for the NSEU stated during a live streamed news conference. Son Woomok, a union leader, emphasized the need for transparent performance evaluation systems, stating that "the company is not hearing us and they are not communicating from our last negotiation session."

Samsung, the world's largest producer of memory chips, acknowledged the strike's occurrence but assured that production and management activities would continue unaffected. "There is no impact on production and management activities," a Samsung spokesperson stated, also highlighting the low utilization rate of annual leave compared to previous holidays. However, the strike casts a spotlight on broader challenges facing Samsung Electronics, particularly in the context of the semiconductor industry's dynamics.

Historically, the company resisted unionization vehemently, employing tactics to deter organizing efforts. However, changing political dynamics and internal controversies paved the way for the formation of the NSEU in 2019. 

Last week, the NSEU announced that nearly a quarter of the company's total workforce in the country would participate in a one-day strike, raising concerns within the semiconductor industry.

“Having 20% of its workforce on strike will significantly impact the company as a whole, especially at a time when it needs to act quickly in the ever-evolving semiconductor industry,” said Kim Dae-jong, professor of business, Sejong University. “Unlike Hyundai Motor, which has dealt with strikes almost annually, Samsung management will struggle to control this situation because it has never dealt with a strike before.”

In recent years, Samsung Electronics encountered various challenges, including a historic chip shortage during the COVID-19 pandemic and fluctuating demand due to global economic uncertainties. Despite these hurdles, the company anticipates a resurgence in demand, driven by the burgeoning artificial intelligence (AI) market. The reported tenfold increase in first-quarter operating profit underscores Samsung's optimism regarding high demand for AI and high-end chips.