Samsung Electronics (005930.KS) employees commenced a three-day strike on Monday, seeking better pay and additional benefits. The National Samsung Electronics Union (NSEU), representing nearly 30,000 members, roughly a quarter of Samsung’s South Korean workforce, is pushing for an extra day of annual leave for unionized workers and changes to the employee bonus system.
Despite low participation and automated production minimizing the strike’s impact on output, analysts indicate the action highlights declining staff morale at a crucial time for the chip industry as tech firms pivot towards artificial intelligence (AI).
The union’s initial industrial action last month involved coordinated annual leave to stage a mass walkout, which Samsung claimed did not affect business activities. The company stated that Monday’s production remained undisrupted. However, the union reported that 6,540 workers would strike this week, primarily at manufacturing and product development sites. They warned that operations could be affected, as striking workers include those monitoring automated production lines and equipment.
Union officials reported that about 3,000 strikers participated in a rally near Samsung’s headquarters in Hwaseong, south of Seoul. Union president Son Woo-mok disputed media claims of low participation, attributing it to the union’s relative youth and limited time to educate members about the issues.
Union vice president Lee Hyun-kuk indicated potential for further strikes if Samsung’s proposals do not improve. Samsung’s current offers include flexibility in pay and leave conditions but fall short of the union’s demands for increased pay and additional leave. The union also seeks equality in the bonus system, criticizing the disparity between bonuses for rank-and-file workers, which are tied to operating profit after deducting capital costs, and executive bonuses based on personal performance goals.
Park Jun-ha, a 20-year-old engineer at Samsung’s chip packaging lines who joined the firm in January, expressed dissatisfaction with the “opaque” bonus scheme, lamenting that his pride in working for Samsung had diminished.
Since Samsung pledged in 2020 to cease discouraging organized labor, union membership has grown, demanding more attention as the company faces competitive challenges in AI chip development. Analysts note Samsung’s slower progress in high bandwidth memory (HBM) chips, crucial for AI processors, as a factor in its struggle against rival SK Hynix (000660.KS).
Despite these internal issues, Samsung estimated a more than 15-fold increase in second-quarter operating profit, driven by rebounding chip prices amid the AI boom, lifting earnings from the previous year’s low comparison base. On Monday, Samsung’s share price rose 0.2% in afternoon trade, having climbed as much as 1.72% earlier to its highest point since January 2021. Last week, it surged 6.9% following preliminary quarterly earnings that exceeded analyst expectations.
