Workers at Samsung Electronics launched a three-day strike for better pay on Monday, with their union warning of additional action if South Korea’s largest conglomerate fails to meet their demands.
With around 30,000 members, making up nearly a quarter of Samsung’s South Korean workforce, the National Samsung Electronics Union (NSEU) is also calling for an extra day of annual leave for unionized workers and a revamp of the employee bonus system.
Analysts believe the strike is unlikely to significantly impact output at the world’s largest memory chipmaker due to low participation and automated production.
However, it does indicate a drop in employee morale at a crucial moment for the chip industry as tech companies increasingly adopt artificial intelligence.
Last month, the union’s initial industrial action involved organising annual leave to orchestrate a mass walkout, which Samsung reported had no impact on business operations.
The firm confirmed on Monday that there was no disruption in production.
Declining to disclose last month’s strike participation levels, the union announced that 6,540 workers will initiate a strike this week, primarily at manufacturing sites and in product development.
They emphasised the involvement of workers tasked with monitoring automated production lines and equipment, potentially affecting operations.
Last month, the union’s initial industrial action involved organising annual leave to orchestrate a widespread walkout, which Samsung reported had no effect on business operations.
The company reiterated on Monday that production remained uninterrupted.
With last month’s strike participation levels undisclosed, the union stated that 6,540 workers are set to strike this week, mainly at manufacturing sites and in product development.
They highlighted that the strike involves employees who monitor automated production lines and equipment, which could disrupt operations.
Union officials reported that approximately 3,000 strikers gathered for a rally in the rain near Samsung’s headquarters in Hwaseong, located south of Seoul.
President Son Woo-mok of the union refuted media reports of low participation, explaining to Reuters that the five-year-old union had not adequately informed its members about the issues in time.
“Our efforts to educate about labor unions have not been sufficient. However, I don’t believe this level of participation is low, considering our union’s relative youth compared to others,” he stated.
Should Samsung fail to improve its proposals, Lee Hyun-kuk, the union’s vice president, indicated that further strikes could be imminent.
Lee informed Reuters that Samsung’s proposals include flexibility in pay and annual leave conditions, but they fall short of meeting the union’s demands for higher pay and increased leave.
The union is also pushing for fairness in the bonus structure. They pointed out that bonuses for ordinary workers are determined by subtracting capital costs from operating profits, while executives’ bonuses are linked to personal performance objectives.
“I used to tell people I was proud to work at Samsung, but the reality is different,” said Park Jun-ha, 20, an engineer at Samsung’s chip packaging lines who started at the company in January. He expressed dissatisfaction with its “opaque” bonus system.
Analysts noted that the union’s membership has expanded since Samsung pledged in 2020 to cease discouraging organised labor.
As Samsung contends with competition in AI chip applications, the increasing influence of the union is demanding attention.
Union officials attribute Samsung’s AI challenges to sluggish progress in developing high-bandwidth memory (HBM) chips, which are crucial for AI processors.
This has led to Samsung’s share price performance lagging behind its compatriot chip rival SK Hynix.
Despite these challenges, Samsung projected a more than 15-fold increase in second-quarter operating profit on Friday.
This surge was driven by rising chip prices due to the AI boom, significantly boosting earnings compared to the low base of the previous year.
On Monday afternoon, Samsung’s share price rose 0.2% in afternoon trading, having earlier peaked at a 1.72% increase, marking its highest level since January 2021.
The previous week, the stock surged 6.9% following preliminary quarterly earnings that surpassed analyst expectations.
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