Samsung Union Announces Indefinite Strike—Move May Impact Global Memory Chip Supplies

Published 7 days ago
By Forbes | Siladitya Ray
Samsung Union Steps Up Pressure Over Pay With Three-day Strike
Samsung Electronics Co. workers chant slogans during a protest outside the company's semiconductor plant in Hwaseong, South Korea, on Monday, July 8, 2024. Samsung workers walked off the job Monday to stage a rally demanding better pay, beginning the biggest organized labor action in the South Korean conglomerate's half-century history. Photographer: Jean Chung/Bloomberg via Getty Images

TOPLINE

Samsung Electronics’ unionized workers in South Korea announced an indefinite strike on Wednesday to step up their campaign for a pay raise—in a move that could impact global chip supplies.

KEY FACTS

The National Samsung Electronics Union said the decision to go on an indefinite strike was made after the company’s leadership failed to engage in dialogue with them during a three-day walkout by some of its members, Yonhap News Agency reported.

According to the union, around 6,500 of its members are presently participating in the strike—including more than 5,000 workers from the company’s semiconductor division.

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Samsung told several news outlets that the strike hasn’t caused any disruptions so far.

On its website, the union claimed it had “clearly identified line production disruptions” and warned the company would “regret the decision” to not engage in dialogue.

According to Bloomberg, the union is first targeting a smaller chip fabrication plant before turning its focus towards Samsung’s high-bandwidth memory chip production facility in Pyeongtaek.

The union’s demands include a 3.5% increase in base pay for all its members, a revamping of the bonus payments structure and an extra day of leave to mark the day of the union’s founding.

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BIG NUMBER

Around 31,000. That is the total number of workers represented by National Samsung Electronics Union, accounting for nearly a quarter of Samsung Electronics’ 125,000 strong workforce.

NEWS PEG

Samsung is the world’s largest maker of memory chips, which have emerged as a key driver of profits for the company amid an AI boom. According to the research firm Trendforce, Samsung accounted for 45.5% of the global DRAM chip market share and 36.6% of the NAND Flash memory chip market—both essential components in computers, smartphones and servers. However, Samsung’s efforts to gain AI juggernaut Nvidia’s approval for its latest High Bandwidth Memory chips (HBM3e) have run into challenges with Nvidia CEO Jensen Huang suggesting it requires more engineering work. Bloomberg notes that while most of Samsung’s HBM manufacturing is automated, any disruptions from the strike could seriously hurt the company’s chances of displacing rival SK Hynix as Nvidia’s preferred memory chip supplier.

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