Samsung Electronics Workers Stage Historic Strike

In an unprecedented move, workers at Samsung Electronics went on strike for the first time ever on Friday. The one-day strike was organized by the National Samsung Electronics Union (NSEU), the largest of Samsung’s unions, and took place outside Samsung’s Seoul office building. The strike stems from a deadlock in negotiations over pay bonuses and time off. Most of the striking workers hail from Samsung’s chip division, underscoring the specific challenges the company faces in this intensifying AI sector.

Despite the strike, reports indicate that it is unlikely to disrupt chip production or cause shortages. However, union leaders have signaled that more actions could follow if management remains unresponsive to their demands. The strike highlights ongoing tensions within Samsung, especially within its semiconductor division, which has been under significant pressure because of the AI boom.

Last year, Samsung’s chip division reported a staggering 15 trillion won ($11 billion) loss, marking a 15-year low in operating profits. This decline was exacerbated by the company’s inability to meet the surging demand for high-bandwidth memory chips, crucial for powering next-gen AI features. Consequently, local rival SK Hynix overtook Samsung as the market leader in this segment.

The timing of the strike is particularly awkward for Samsung as it strives to regain its footing in the competitive AI chip market. The company’s struggles have been compounded by its historical issues with labor relations. Samsung has a long-standing history of illegal union-busting activities.

South Korea, while familiar with labor movements, sees this strike as significant given Samsung’s substantial influence on the national economy. The conglomerate is responsible for approximately 20 percent of South Korea’s GDP, making any disruptions within Samsung a matter of national concern.

The outcome of this strike and Samsung’s handling of the situation will be closely watched, not just for its immediate impact on the company’s operations, but also for its broader implications on labor relations within South Korea. The National Samsung Electronics Union has a membership of approximately 28,400 workers.