Samsung union targets cutting-edge AI chip factories as strike eases

(Bloomberg) — Samsung Electronics Co.’s largest union is calling on workers at one of the company’s most advanced AI memory chip factories to strike, changing tactics after its campaign for higher wages lost momentum.

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Several hundred employees took part in protests outside Samsung’s high-speed storage facility in Pyeongtaek, south of Seoul, on Thursday and Friday after the union called for a general strike this week. While that’s a far cry from the thousands who turned out for a public rally outside Samsung’s main plant in Hwaseong on Monday, union leaders told Bloomberg News they had now targeted a small but strategically important complex to increase pressure.

The Pyeongtaek site is the nerve center of Samsung’s efforts to secure a piece of a key market. The chipmaker is currently trying to convince Nvidia Corp. to use its high-bandwidth memory – a prerequisite for competing with smaller rival SK Hynix Inc. in the booming AI field.

Targeting the high-end chip production line was the “most effective” measure against management, said Lee Hyun-kuk, deputy secretary general of the union.

Samsung shares fell as much as 4 percent in Seoul on Friday, the biggest daily loss in more than two months amid a general sell-off in Asian technology stocks.

Despite the falling numbers, this week’s strikes and protests were the largest and most comprehensive labor protests in Samsung’s 50-year history. The largest union, representing more than 30,000 employees, called a general strike on Thursday – a surprise move that increased the risk of production disruptions. Samsung has repeatedly said since Monday that the impact on production has so far been minimal.

“Samsung Electronics remains committed to negotiating with the union in good faith,” the chipmaker said in a statement, adding that it hopes to resume talks soon. “The company is currently producing as planned and is having no problems meeting or responding to customer requests.”

It is unclear how many in total will heed the union’s call, but there are concerns that the escalating action could become an avalanche effect, damaging the country’s best-known company or triggering similar reactions in the recovering technology and chip industries.

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On Thursday, Son Woo-mok, chairman of the National Samsung Electronics Union, told Bloomberg Television he had received reports of significant disruptions at factories where machines were idle after employees walked off the job, but he declined to estimate how many workers might ultimately join a general strike.

“The company claims there is no production stoppage, but that is not true,” Son said. “I hear that many machines are being shut down, but they do not have enough staff to handle it. So many machines are idle.”

The union had previously said it would initially focus on production lines that use 8-inch silicon wafers and rely more heavily on human labor. Such early-generation production lines account for only a small portion of Samsung’s total semiconductor production.

A large part of the company’s production is automated, but the company can hardly afford any production bottlenecks in the coming weeks.

Samsung shares fell 3.7 percent on Friday, having been largely unchanged the day before after the union called a general strike, but Son said there may be internal problems that have not yet come to light.

“When you produce semiconductor parts, you obviously have to do inspections and things like that,” Son said. “And right now there is a big backlog, so there will definitely be quality problems.”

– With support from Katria Alampay, Lauren Faith Lau and Yoolim Lee.

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