Samsung strike becomes ‘indefinite’ as tensions over wages and benefits grow

The strike, originally scheduled to last three days, has now been extended “indefinitely” as Samsung (OTCPK:SSNLF) union members seek to pressure the South Korean tech giant to offer higher wages and better benefits.

The members of the National Samsung Electronics Union, which has around 30,000 Samsung employees say the tech giant is not willing to negotiate with them. Of the 30,000 employees, about 6,500 have walked off the job, including 5,000 in the company’s semiconductor division.

According to the Associated Press, Samsung has stated that there have been no production disruptions and that “the company remains committed to negotiating in good faith with the union.”

The union responded that there had been some production interruptions in order to force management to negotiate.

The union also demanded equality in Samsung’s bonus system, saying that bonuses for lower-level employees and executives are calculated differently. The bonus for lower-level employees is calculated based on the cost of capital deducted from operating profit, while executives’ bonuses are based on personal performance targets.

The union organized a one-day strike on June 7, which was the first ever for the company. Samsung said the strike did not affect production. In the past, the NSEU had demanded wage increases of 6.5 percent and bonuses linked to company profits.

According to consulting firm TrendForce, Samsung had an 18 percent share of the global foundry market last year, while Taiwan Semiconductor Manufacturing (TSM) accounted for 52 percent.

Although Samsung’s semiconductor revenue declined year-on-year in 2023, it will increase in 2024. “The company’s recent growth is expected to continue, driven by its advances in AI technology and its leading market share in the global smartphone industry,” said Seeking Alpha analyst and MS Research contributor.

Seeking Alpha’s Ravikash Bakolia contributed to this story.