Samsung Electronics workers strike as union’s voice grows in South Korea

SEOUL – Samsung Electronics workers in South Korea began a three-day strike for better pay on July 8, with their union pointing to further action should South Korea’s biggest conglomerate continue to fall short of its demands.

The National Samsung Electronics Union, whose roughly 30,000 members make up almost a quarter of the firm’s South Korean workforce, also wants an extra day of annual leave for unionised workers and change to the employee bonus system.

Low participation and automated production mean the strike is unlikely to have a significant impact on output at the world’s biggest memory chipmaker, analysts said.

Still, it signals a decline in staff loyalty at a pivotal point in the chip industry as tech firms embrace artificial intelligence (AI).

The union’s

first industrial action in June

involved coordinating annual leave to stage a mass walkout, which Samsung said had no impact on business activity.

The firm said on July 8 there was no disruption in production.

The union, which did not disclose June’s participation, said 6,540 workers are on strike this week, mostly at manufacturing sites and in product development.

It said the strike includes workers who monitor automated production lines and equipment, so operations could be affected.

Union officials said about 3,000 strikers attended a rally in the rain near Samsung’s headquarters in Hwaseong, south of Seoul.

Union president Son Woo-mok disputed media reports of low participation, telling Reuters that the five-year-old union did not have enough time to educate members.

“Education about labour unions... has not been enough. But I don’t think this participation is low because our union is still young compared to other unions,” he said.

Mr Lee Hyun-kuk, the union’s vice-president, said there could be further strikes if Samsung does not improve its proposals.

Samsung’s proposals include flexibility in pay and annual leave conditions but do not meet union demands of increased pay and leave, Mr Lee told Reuters.

Union officials also want equality in the bonus system. They said bonuses for rank-and-file workers are calculated by deducting the cost of capital from operating profit, whereas those for executives are based on personal performance goals.

“I was telling people that I was proud to work at Samsung, but the truth is I am not,” said 20-year-old Park Jun-ha, an engineer at Samsung’s chip packaging lines who joined the firm in January, adding that he was not satisfied with its “opaque” bonus scheme.

The union’s membership has grown since Samsung pledged in 2020 to stop discouraging organised labour.

Its growing voice is demanding attention just as Samsung is struggling to navigate competition in chips used for AI applications, analysts said.

Samsung’s share price performance has lagged compatriot chip rival SK Hynix, with union officials blaming Samsung’s AI woes on slow development in high bandwidth memory chips that are in high demand for use in AI processors.

Even so, Samsung estimated a more than fifteenfold rise in second-quarter operating profit on July 5, as rebounding chip prices driven by the AI boom lifted earnings from the year prior’s low comparison base.

Its share price was up 0.2 per cent in afternoon trade on July 8 after rising as much as 1.72 per cent earlier in the session to its highest since January 2021.

Last week, it jumped 6.9 per cent on preliminary quarterly earnings that exceeded analyst estimates. REUTERS