Samsung Electronics Co.’s largest labour union, representing over 30,000 workers, has declared an indefinite strike, a move that heightens the risk of production disruptions at the world’s leading memory chipmaker.
This marks the largest organised labour action in the South Korean conglomerate’s fifty-year history. While it remains uncertain how many workers will ultimately participate, there is concern that the strike could impact the country’s most prominent corporation or inspire similar actions across the recovering tech and chip industry.
Earlier this week, thousands of workers rallied outside Samsung’s chipmaking complexes south of Seoul, initiating what was initially planned as a three-day walkout to demand better pay.
“Management has no intention of dialogue. We have clearly identified line production disruptions and the company will regret this decision,” the union said in a statement. The union will first target a smaller 8-inch production facility that relies more on human workers before it targets high-bandwidth memory production in Pyeongtaek. “Management will eventually relent and come to the negotiating table,” the statement said.
Much of Samsung’s production is automated, but the company can ill-afford any manufacturing snarls in the coming weeks. The company’s trying to convince Nvidia Corp. to use its high-bandwidth memory, a prerequisite for it to catch up to smaller rival SK Hynix Inc. in the booming AI arena.
“Samsung will ensure no disruptions occur in production lines,” the company said in a statement. “We remain committed to engaging in good faith negotiations with the union.”
The strike also comes as the global semiconductor supply chain navigates heightened US-China tech rivalry and geopolitical challenges. Samsung accounts for roughly 20% of the global DRAM market and around 40% of NAND flash, which is used in smartphones and servers.
Analysts claim that the investors remain largely unfazed. Lee Seung-woo, head of Eugene Investment & Securities’ research center said that the market is focused on how quickly Samsung can win approval from Nvidia to supply HBM, and has “little interest in the strike,”. It’s also difficult to assess what the impact will be on earnings, as a potential production disruption may drive up chip prices, he said.
The workers’ demands follow Samsung’s posting a 15-fold surge in operating profit in the June quarter, reflecting a rebound in memory chip demand and an investment boom in AI infrastructure.
Samsung’s largest union spent weeks preparing for the strike after pay and vacation negotiations failed last month. This week’s strike represents a rapid escalation from a single-day strike in early June, the first in Samsung’s 55-year history.
Union leaders intend to bring attention to their demands by disrupting production at one of Samsung’s most advanced chip facilities. The strike coincides with Samsung’s major product launch of the year in Paris, where the company is expected to unveil new foldable phones and watches featuring AI and novel health tracking features.
Union leaders reported that over 6,500 workers signed up for the three-day walkout, although police estimated the turnout to be closer to half that number on Monday.