More than 6,500 workers at Samsung Electronics have begun a large-scale strike over wages and working conditions following the first strike at the South Korean technology giant.
On Monday, workers from the National Samsung Electronics Union, whose more than 30,000 members make up a quarter of the South Korean company’s workforce, went on strike.
Previously, at the beginning of June, union members took a day off from their annual vacation as part of the first strike in Samsung’s 55-year history.
The union is demanding that Samsung respect workers’ working conditions, improve bonuses and increase vacation entitlement.
With only about 20 percent of NSEU members participating, the strike was less intense than strikes at other major Korean companies such as Hyundai Motor, where unions are more militant. However, the strike was not mandatory and observers said the turnout was higher than the union and the public had expected.
The three-day promotion comes as Samsung seeks to address concerns about its declining technological competitiveness, particularly in the production of advanced D-Ram chips such as high-bandwidth memory chips used to train artificial intelligence models such as ChatGPT.
The union expects disruptions in Samsung’s chip production as more workers than expected are taking part in the strike, including 5,000 employees in semiconductor design, manufacturing and development.
“We are doing this out of desperation because we know that there is no other way than now,” said union leader Son Woo-mok at a rally in the pouring rain in front of Samsung’s headquarters in Hwaseong, 45 kilometers south of Seoul. “We will keep fighting until the company changes.”
Samsung declined to comment on the strike. The union threatened a five-day strike next week if the company did not accept its demands.
The strike comes after Samsung last week reported its highest second-quarter revenue and profit growth in years, citing the industry’s strong recovery from last year’s historic slump. The company saw its operating profit increase more than 15-fold to 10.4 trillion won ($7.5 billion) from April to June on strong demand for artificial intelligence products.
Despite stronger-than-expected quarterly results, the world’s largest memory chip manufacturer is struggling with a number of challenges.
Samsung shares have gained about 10 percent so far this year, but are well below the 60 percent rise in shares of domestic memory chip rival SK Hynix as investors remain concerned about the company’s performance in the booming AI segment.
The labor unrest is a new challenge for a company with an anti-worker reputation. Union membership has risen sharply since Chairman Lee Jae-yong announced the end of the company’s no-union policy in 2020.
The NSEU accuses Samsung’s management of failing to capitalize on the booming demand for artificial intelligence. The company has not yet passed Nvidia’s qualification tests for high-bandwidth memory chips, while SK Hynix benefits from being the exclusive supplier of the most advanced chips to the US company.
Many analysts expect Samsung to start supplying Nvidia with high-bandwidth chips in the second half of the year. “That will probably happen in the near future,” said Chan Lee, managing partner at Petra Capital Management, a Seoul-based hedge fund. “Now that the direction is clear, the company will quickly catch up in this area.”
