Samsung Electronics workers’ union staged its first walkout on Friday, a sign of worker confidence, as South Korea’s most powerful conglomerate competes for chips used in artificial intelligence.
The National Samsung Electronics Union (NSEU), whose roughly 28,000 members make up more than a fifth of the company’s workforce, has announced it will stop work for the day to demand better pay.
The expulsion is unlikely to impact semiconductor production or supply immediately but will increase pressure on Samsung Electronics as it pursues artificial intelligence and closes a gap in its chip-making contract with Taiwan’s TSMC, analysts said.
“The purpose of today’s strike is to have a meaningful discussion with management,” NSEU official Lee Hyun-Kuk Said. He said the union was preparing further action on Friday but gave no details. According to Samsung Electronics, there was no impact on production or businesses.
The strike was timed after a public holiday and there were fewer workers on the public holiday than on the same day last year, the company said. The union did not disclose how many members participated in the strike-through annual leave.
“We are in good faith with the union and will continue discussions with them,” a company official said. Samsung Electronics’ share price fell 0.1%, while the benchmark KOSPI rose 1.2%. Market researcher Trend Force said the exclusion is unlikely to affect DRAM or NAND memory production or lead to supply shortages because production is highly automated.
Additionally, the layoff appears to involve more employees from the company’s Seoul headquarters than production and was planned for one day, Trend Force said. The strike follows protests by other workers in recent weeks outside the Seoul office and outside a chip factory in Hwasong, south of the capital.
They started after Samsung Electronics decided to raise wages by 5.1% this year. NSEU, the largest of the company’s five unions, wants further commitments such as improvements to the performance pay system and extra annual leave.
Last week, a coalition of five unions at Samsung subsidiaries, including another smaller union at Samsung Electronics, urged the NSEU to continue negotiations instead of confrontation and said they would not join the strike.
Samsung Electronics’ success has been challenged in some areas, including some high-end chips. It recently replaced the head of its semiconductor unit to navigate the “crisis” affecting the industry.
Any broader or prolonged labor dispute would cause headaches for the world’s largest memory chipmaker, which is trying to catch up with rivals that make high-bandwidth memory (HBM) chips used in artificial intelligence applications.
SK Hynix and Micron already supply HBM chips to Nvidia, which controls about 80% of the global market for graphics processing units for AI applications. Nvidia announced this week that three chipmakers will supply HBM chips to the US company, although SK Hynix will remain its main supplier.
Last month, Samsung’s HBM chips have yet to pass Nvidia’s performance tests, which analysts see as an important milestone for reputation and profits. While Samsung struggled in parts of its chip business, it dethroned Apple to become the world’s largest mobile phone vendor in the first quarter, accounting for 20% of shipments, according to research firm Counterpoint.
Union membership in South Korea has fluctuated about 10 percent since 2004, according to labor ministry data.
