On Friday, for the first time in the company’s history, Samsung Electronics employees went on strike. The move comes at a time when the Korean corporation faces increased competition from other chipmakers, especially amid rising demand for AI chips.
The National Samsung Electronics Union (NSEU), the largest of the company’s several unions, called for a one-day strike at a Samsung office building in Seoul after negotiations over pay bonuses and time off stalled. The New York Times reports that most of the striking workers are from Samsung’s chip division. (Technically, Samsung Electronics is just a subsidiary consisting of its consumer technology, device, and semiconductor businesses; Samsung itself is a conglomerate that controls real estate, retail, insurance, food manufacturing, hotels, and more.)
It is unclear how many of the approximately 28,400 NSEU members took part in the strike. Still, many stores report that the strike is unlikely to impact chip production or cause shortages. Union leaders told Bloomberg that further action is planned if management refuses to engage.
That said, the fact that this is happening at all is an awkward moment for Samsung, especially given the tensions surrounding the chipmaking part of its business.
The division posted a loss of 15 trillion won ($11 billion) last year, leading to its lowest operating profit in 15 years. The current artificial intelligence boom has played a large role in the massive loss. Samsung has long been a global leader in high-bandwidth memory chips that are now in demand to deliver next-generation AI capabilities. However, last year’s decline was partly due to Samsung being unprepared for increased demand, allowing local rival SK Hynix to take the top spot.
South Korea is no stranger to labor movements, but this strike is also significant simply because it’s Samsung. The company as a whole accounts for about 20 percent of South Korea’s GDP. If Samsung sneezes, the whole country will catch a cold. Moreover, Samsung has a decades-long history of illegally suppressing trade unions. In 2020, Lee Jae-yong — then heir apparent and now executive chairman of Samsung Electronics — apologized and promised to end the company’s policy of “union-free management.” The immediate test of this commitment will be how he handles conflict in the future.
Credit : www.theverge.com
