Samsung workers’ union begins three-day strike in South Korea – Firstpost

July 8, 2024

Samsung’s share price rose slightly on Monday, reflecting investor confidence after preliminary results last week beat analysts’ expectations. The stock hit its highest since January 2021, buoyed by strong performance in the chip market. Image credit: Reuters

Samsung Electronics has been on a three-day strike since Monday as workers fight for better wages. The National Samsung Electronics Union (NSEU), which represents around 30,000 members – nearly a quarter of the company’s South Korean workforce – is demanding not only higher wages but also an additional day of genuine rest, vacation for union members and changes to the bonus system for employees.

Despite the strike, analysts expect the impact on production at the world’s largest memory chip manufacturer to be minimal.

The reasons given for this are the low participation rate and automated production processes. However, the strike also shows the growing dissatisfaction among employees, especially at a time when the chip industry is relying heavily on artificial intelligence.

Last month, the union’s first strike was a coordinated mass strike that took advantage of annual leave and which Samsung said had no impact on operations. On Monday, Samsung again reported that there had been no disruption to production.

This time, the union announced that 6,540 workers would take part in the strike, mainly those in production facilities and product development. It pointed out that workers responsible for monitoring automated production lines and equipment are also involved in the strike, suggesting that operations could be disrupted.

EUnion President Son Woo-mok disputed media reports of low turnout, saying that the union, which is only five years old, has not had enough time to fully inform its members about the issues. He believes the turnout rate is appropriate for such a young union.

Vice President Lee Hyun-kuk warned that further strikes could occur if Samsung does not meet the union’s demands. Samsung’s current proposals offer flexibility in pay and vacation conditions, but fall short of the union’s expectations for higher pay and vacation conditions. In addition, the union is demanding a fairer bonus system.

They pointed out that executives’ bonuses are based on personal performance targets, whereas bonuses for ordinary workers are calculated by deducting the cost of capital from operating profit.

An engineer named Park Jun-ha, who joined Samsung in January, expressed his disappointment with the company’s opaque bonus system and said he was no longer proud to work there.

The union’s influence has grown since Samsung pledged in 2020 to stop discouraging unions. This growing voice within the company comes at a time when Samsung is facing stiff competition in the chip market, particularly in chips for AI applications. Despite these challenges, Samsung reported a significant increase in operating profit in the second quarter, thanks to the recovery in chip prices driven by the AI boom.

Samsung’s share price rose slightly on Monday, reflecting investor confidence after last week’s preliminary results beat analysts’ expectations. The stock hit its highest since January 2021, buoyed by strong performance in the chip market.