People walk past the Samsung logo displayed on a glass door at the company’s Seocho building in Seoul on April 30, 2024. A major union representing tens of thousands of people at South Korean tech giant Samsung Electronics said on May 29 that workers will go on strike for the first time ever, potentially threatening key global semiconductor supply chains. (Photo by Jung Yeon-je / AFP)
SEOUL, South Korea — Workers at tech giant Samsung Electronics in South Korea staged the first-ever strike at the company on Friday, the head of a major union representing tens of thousands of people told AFP.
Samsung Electronics is one of the world’s largest smartphone makers and also one of the only companies globally to produce high-end memory chips used for generative AI, including top-of-the-line AI hardware from industry leaders such as Nvidia.
Management at the firm, the world’s biggest producer of memory chips, has been locked in negotiations with the union over wages since January but the two sides have failed to narrow their differences.
“The first strike at Samsung Electronics is taking place today through the use of paid leave, and it is understood that many employees are participating,” Son Woo-mok, head of the National Samsung Electronics Union said.
“It’s difficult to provide an exact number, but from what I’ve seen of the workplace attendance in the morning, there is a significant difference from the usual,” he added.
No impact seen on shipments
The strike in South Korea is the first walkout by the tech giant’s workers.
Samsung Electronics is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-controlled conglomerates that dominate business in Asia’s fourth-largest economy.
Taiwan-based market research firm TrendForce said that the strike would not impact DRAM and NAND Flash production, nor will it cause any shipment shortages.
Samsung accounts for a significant chunk of the global output of high-end chips, but the strike involves headquarters employees, not workers on the production lines, TrendForce said.
Additionally, it is only a one-day strike, and falls during a long-planned holiday period in South Korea, meaning the company would like already have adjusted anticipated staffing levels.
READ: Samsung Electronics union announces first-ever strike
“Finally, fabs rely heavily on automated production and require minimal human labor. Therefore, the strike will not have any substantial impact on the future memory supply,” TrendForce said in a report.
Historic strike
Even so, the strike carries historical importance, “since Samsung resisted unionization and engaged in union-busting for so long,” Vladimir Tikhonov, professor of Korean Studies at the University of Oslo, told AFP.
He said the collective action showed that “there is a gradual tendency towards empowerment of labor in South Korea.”
Samsung Electronics avoided unionization of its employees for almost 50 years — sometimes adopting ferocious tactics, according to critics — while rising to become the world’s largest smartphone and semiconductor manufacturer.
Samsung founder Lee Byung-chul, who died in 1987, was adamantly opposed to unions, saying he would never allow them “until I have dirt over my eyes”.
But in 2019, organizers seized the opportunity presented by the left-leaning government of President Moon Jae-in — a former rights lawyer who represented trade unions — and controversy around the bribery trial of the company’s then-vice-chairman Lee Jae-yong, the founder’s grandson, to set up a union.
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Semiconductors are the lifeblood of the global economy — and South Korea’s leading export — used in everything from kitchen appliances and mobile phones to cars and weapons.
Demand for advanced chips that power AI systems has skyrocketed because of the success of ChatGPT and other generative AI products.