Samsung Electronics workers have initiated a three-day strike demanding better pay, additional annual leave, and changes to the employee bonus system. The National Samsung Electronics Union (NSEU), representing approximately 30,000 members or nearly a quarter of Samsung’s South Korean workforce, warned of further action if their demands are not met. Despite low participation and automated production minimizing immediate output impacts, the strike underscores declining staff morale during a pivotal moment in the chip industry as tech companies increasingly adopt artificial intelligence (AI).
Last month’s initial industrial action, which coordinated annual leave for a mass walkout, reportedly had no impact on business activity, according to Samsung. The company stated on Monday that current production remains unaffected. The union, however, announced that 6,540 workers, primarily from manufacturing and product development sectors, will strike this week, potentially affecting operations as some strikers are responsible for monitoring automated production lines and equipment.
Approximately 3,000 union members participated in a rally near Samsung’s headquarters in Hwaseong, south of Seoul, despite the rain. Union president Son Woo-mok refuted reports of low participation, attributing it to the union’s relative youth and limited time for member education on the issues. “Education about labor unions has not been enough, but our union is still young compared to others,” Son remarked.
Lee Hyun-kuk, the union’s vice president, indicated that additional strikes could occur if Samsung does not enhance its proposals. Samsung’s current offers include flexible pay and leave conditions but fall short of the union’s demands for increased pay and leave. The union also seeks equality in the bonus system, criticizing the disparity between rank-and-file workers, whose bonuses are deducted from operating profit costs, and executives, whose bonuses are based on personal performance goals.
Engineer Park Jun-ha, who joined Samsung’s chip packaging lines in January, expressed dissatisfaction with the company’s opaque bonus scheme. “I was telling people that I was proud to work at Samsung, but the truth is I am not,” Park said.
The union’s influence has grown since Samsung’s 2020 pledge to stop discouraging organized labor. This growing voice demands attention as Samsung navigates competition in AI chip applications. Analysts note that Samsung’s lag in high bandwidth memory (HBM) chip development, crucial for AI processors, has impacted its performance compared to rival SK Hynix.
Despite these challenges, Samsung projected a significant rise in second-quarter operating profit due to rebounding chip prices driven by the AI boom. Samsung’s share price saw a slight increase on Monday, continuing an upward trend following better-than-expected preliminary quarterly earnings. Last week, the stock surged 6.9%, reflecting the positive earnings report.
The outcome of the strike and Samsung’s response to union demands will be closely watched as it strives to balance employee satisfaction with maintaining its competitive edge in the rapidly evolving tech landscape.
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