Samsung Workers Go On 3-Day Strike Over Pay & Benefits, Memory Chip Production Likely To Take A Hit

The management team of Samsung has been locked in negotiations with the union since January this year but, both sides seem to be at an impasse.

The protest kicked off today and will last till Wednesday. (Image Source: X/@BloombergTV)

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Workers at Samsung have staged a three-day general strike against the company over pay and benefits. The protest kicked off today and will last till Wednesday. According to a report by the news agency AFP, the head of a union representing tens of thousands of employees has warned that this protest will impact memory chip production. This is a huge concern for Samsung as the tech giant is the world's largest memory chip maker and accounts for a large portion of the global output of high-end chips.

Thousands of workers gathered in Hwaseong, Gyeonggi, an hour south of Seoul, outside the company's foundry and semiconductor factory. The strike was announced last week and the workers said that it was a last resort after talks broke down. It comes on the heels of a one-day walkout in June, the first collective action at the company which went decades without unionisation.

More than 6,500 Samsung Electronics workers stage a rally demanding better pay, beginning the biggest organized labor action in the South Korean conglomerate’s half-century history. It is intended to send a message to the company, union leaders say.https://t.co/2TpldQEnOM pic.twitter.com/H7mf7GWikm

— Bloomberg TV (@BloombergTV) July 8, 2024

Samsung Vs. Union

The management team of Samsung has been locked in negotiations with the union since January this year. However, both sides seem to be at an impasse on benefits and a rejected 5.1 per cent pay raise offer. The head of the National Samsung Electronics Union, Son Woo-mok told AFP, "The strike has started from today. Today's general strike is just the beginning." While addressing the workers, he said, "Recalling why we are here, please do not come to work until July 10th and do not receive any business calls."

As per the union, around 5,200 people from factory facilities, manufacturing and development have joined the protest. 

The vice president of the union told AFP, "Do they still not think this will affect their production line?"

The reason for the workers rejecting a 5.1 per cent pay hike offer in March was that the previously outlined demands of the union went unnoticed. The demands that the union made included improvements to annual leave and transparent performance-based bonuses.

Samsung's Position In Competitive Market Is At Threat

A business professor at Sejong University, Kim Dae-jong, told AFP, "While the ongoing strike is only scheduled for three days, the participating members include those working in chip assembly lines."

He added, "Given that the union could carry out additional strikes in case the gridlock continues, it could pose a great risk to Samsung management amid its race for dominance in the competitive chips market."

Samsung Is Afraid Of Unions?

For nearly 50 years, Samsung Electronics managed to avoid employee unionization, sometimes using aggressive tactics, according to critics. During this time, the company grew to become the world's largest manufacturer of smartphones and semiconductors.

The company's founder, Lee Byung-Chul, who passed away in 1987, was firmly against unions and famously stated that he would never allow them "until I have dirt over my eyes." The first labour union at Samsung Electronics was established in the late 2010s.