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July 8, 2024

New strike hits Samsung chip facility

The three-day walkout at Samsung will see thousands of workers at the electronics giant campaign for reforms to its bonus system and more annual leave. 

By Greg Noone

Workers at Samsung have commenced a three-day strike at the firm’s chip factory in Hwaseong, South Korea. The industrial action led by the National Samsung Electronics Union (NSEU) comes after an agreement failed to be reached between workers and management over the former’s demands for increased annual leave and reforms to the company’s bonus system. The NSEU argues that the latter, which sees bonuses awarded using a formula that takes into account capital spending by the company in addition to the individual performance of staff, is unfair and not transparent.

“Today’s general strike is just the beginning,” NSEU chief Son Woo-mok told AFP, before urging workers to refrain from conducting any work-related duties during the three-day strike period. “Recalling why we are here, please do not come to work until July 10th and do not receive any business calls.”

A chip facility owned by Samsung at Hwaseong, South Korea.
Samsung’s chip facility at Hwaseong, South Korea. The National Samsung Electronics Union (NSEU) has staged a strike involving over 5,000 workers at the facility in a protest against working conditions at the company. (Photo: Shutterstock)

Sustained industrial action threatens Samsung chip production

As well as reforms to Samsung’s bonus system, NSEU has also argued for a pay increase of 6.5% for its members and an extra day of annual leave. In March, the union rejected an offer of a 5.1% wage rise. As such, the NSEU has advocated industrial action at Samsung’s chipmaking arm which, given its status as one of only three companies in the world capable of manufacturing the world’s most advanced semiconductors, is arguably its most important division.

The NSEU said approximately 5,200 staff had joined its walkout at the firm’s factory in Hwaseong out of its overall membership of 30,000. Sustained industrial action at the facility could begin to reduce output, Sejong University business professor Kim Dae-jong told AFP. “Given that the union could carry out additional strikes in case the gridlock continues,” said Kim, “it could pose a great risk to Samsung management amid its race for dominance in the competitive chips market.”

History of anti-union sentiment at the chaebol

The strike is the second to be organised at Samsung by the NSEU. The first, which took place in June, was widely reported as ineffective, with many workers taking annual leave to participate during a South Korean national holiday which would have seen many staff absent anyway. However, Its mere occurrence was notable given Samsung’s historical antipathy toward unionisation – its founder, Lee Byung-Chul, infamously stated that no such organisation would be permitted to exist within the chaebol “until I have dirt over my eyes.” 

Samsung’s management relaxed this attitude toward organised labour in the late 2010s after several corruption scandals afflicted the company. Ironically, the recent round of strikes by the NSEU comes after the electronics giant forecasted an increase in profits of more than 931% fuelled by the global AI boom and a resurgent demand for the firm’s semiconductors. Even so, Samsung has recently ceded market share in the lucrative memory chip market to rival SK Hynix and has struggled to supply a new version of the crucial semiconductor to Nvidia

Read more: Samsung reveals plan to produce AI chips faster with new turnkey foundry service

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