The Korea Herald


Samsung faces labor struggle at home as union stages indefinite strike

Union claims their actions could disrupt chipmaker's production; management denies

By Lee Jaeeun

Published : July 10, 2024 - 14:39

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Unionized workers of Samsung Electronics stage a rally at the entrance of the company's facility in Hwaseong, 45 kilometers south of Seoul, on Monday. (Yonhap) Unionized workers of Samsung Electronics stage a rally at the entrance of the company's facility in Hwaseong, 45 kilometers south of Seoul, on Monday. (Yonhap)

Samsung Electronics' largest labor union announced Wednesday an indefinite extension of their ongoing strike, claiming that their collective action could cause potential disruptions in production at one of the world’s leading chip manufacturing sites.

The announcement followed a three-day strike, which ended without any engagement from management.

“We declare a second round of strikes for an indefinite period as we have confirmed that management doesn’t have the will to talk with us after the first round,” the National Samsung Electronics Union said in a statement Wednesday.

Demanding a pay raise and bonus, the union began its first-ever strike on Monday. It initially planned to hold a the strike for three days, with a second starting July 15 but decided to go on an indefinite strike.

The union claimed that over 6,000 members have expressed willingness to participate in the strike. Of the total, more than 5,000 members will come from the critical semiconductor division, it added.

Several rounds of talks since January have failed to resolve differences as the union demanded a one-day vacation for all employees and significant salary raises for the 855 members who did not sign the 2024 salary negotiation agreement. They also demand more paid leave, a day-off for all employees and compensation for economic losses incurred during unpaid strikes.

The union claims to represent 31,000 members or approximately 24 percent of Samsung Electronics’ total workforce of about 125,000. Their collective actions would inevitably cause production disruptions, they said, adding that semiconductor factories, though operated by automated systems, require manpower for equipment and quality inspection.

“We confirmed that production of chips was disrupted during the first round of strikes, and the management will regret this.”

Samsung, meanwhile, denied the union's threat of production disruptions and said that production lines are operating normally. The company has prepared to prevent production disruptions due to the strike, it added.

Shin Se-don, an honorary professor of economics at Sookmyung Women's University, said the strike's impact is likely minimal, noting that the management seems to be in no rush to resolve the dispute. But he predicts the dispute will ultimately end in a compromise.

“The management (seems to) believe that if it responds to the union's demands easily, it could set a precedent for similar actions in the future. But I think both sides will reach a compromise soon.”

But the case highlights emerging challenges for Samsung Electronics as the world's largest memory chip maker faces labor struggles that it has not experienced for more than 50 years, according to Hwang Yong-sik, a professor from Sejong University College of Business and Economics. The action could potentially impact its corporate culture that values hierarchy and top-down leadership, he added.

“Because Samsung Electronics traditionally has been a non-union company and a leading global corporation in South Korea at the same time, this case makes a significant challenge," he said.

"As the actions are taking place amid intense global competition in the semiconductor, electronics, and mobile markets, this strike poses a definite risk to Samsung Electronics' organizational culture and global competitiveness.”