Thousands of Samsung Electronics employees rallied in Hwaseong (Seoul, South Korea) on Monday, donning black raincoats amidst the monsoon rains affecting the Korean Peninsula, demanding higher pay increases and fairer bonus standards.
In January, the company’s management tried to negotiate with the union by offering a 5.1% pay raise offer which was turned down by the union. As a result, a one-day walkout in June happened, following which a three-day strike started today.
The company’s largest trade union, the National Samsung Electronics Union (NSEU), announced that the strike has affected semiconductors production, especially the production lines using 8-inch wafers.
The NSEU leaders reported that problems arose on the morning of the strike’s first day as 6,540 union members joined the first day of the three-day strike. The union, which claims a membership of 30,000, representing 24% of Samsung’s 124,000-strong domestic workforce, did not provide specific details on the extent of the production disruption. However, Samsung stated to a news portal that its “business” had not been impacted.
Eight-inch wafers are critical in producing various products, including conventional dynamic random access memory (DRAM) and contract chipmaking. Lee Hyun-kook, NSEU vice president, emphasised the vulnerability of semiconductor production lines during the strike. “Semiconductor lines are much more vulnerable than [management] expected to a strike. We all know that it does not work if just one shift is absent,” he stated during a rally at Samsung’s Hwaseong office while questioning the management’s understanding of the potential impact of the strike.
The strike comes within a week of the company announcing its fastest pace of sales and profit growth in years, reflecting a recovery in memory chip demand. Samsung Electronics informed last week that it saw a 15-fold surge in operating profit to 10.4 trillion won ($7.5 billion) in the June quarter, outstripping analysts’ projections. The company said that sales grew around 23%, the biggest rise since Covid-era highs clocked in 2021. The stock rose 3% to its highest since January 2021.
However, Samsung is striving to catch up in the development of advanced artificial intelligence memory chips, specifically high-bandwidth memory (HBM) chips. Its smaller local rival, SK Hynix, currently leads the market by supplying HBM chips to U.S. chipmaker Nvidia.