July 10, 2024, 1:51 pm | Read time: 4 minutes
It had been announced for some time, and now a major strike at Samsung has been underway since the beginning of the week. This could last longer than initially planned.
Unions in various economic sectors repeatedly call on employees to stop working and push for better conditions. Once again, there is a strike at Samsung. Its end is not yet in sight–and in the worst case, it could even affect consumers worldwide.
Major Strike at Samsung Begins with More Than 5,000 Participants
The South Korean tech giant and the responsible union have been negotiating new collective agreements for months, but the parties have yet to reach an agreement. As a result, the first strike in Samsung’s long history occurred in June, after decades of resisting union organization among its workforce. Last Monday, July 8, 2024, more than 5,000 employees again stopped working, as reported by “ntv” citing AFP.
The company management is primarily negotiating with the National Samsung Electronics Union, which has about 30,000 members, representing more than a fifth of the company’s total workforce. The union rejected an offer for a 5.1 percent wage increase. Additionally, they demanded more annual leave and transparency in performance-based bonuses.
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Samsung Strike Extended Indefinitely
The current strike at Samsung was originally set for three days. However, as reported by “Zeit,” the union has decided to extend it. There is no end date yet. The reason cited is Samsung’s lack of willingness to negotiate.
Meanwhile, there is a new demand from the union, which now calls for a 3.5 percent increase in base salary. The system for performance bonuses should be improved, and they are demanding compensation for the economic losses employees incur due to the strikes. Additionally, they want to secure an extra day of special leave to commemorate the union’s founding.
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Valuable Chip Production at Samsung Threatened by Strike
On Tuesday, Samsung announced that the work stoppages would not affect operations. Even during the one-day strike in June, there was no immediate need for action. However, a senior union representative now contradicts this–production will definitely be affected.
As “ntv” quotes economist Kim Dae-Jong, employees involved in critical chip production are also striking. This poses a significant risk, especially as Samsung is in intense competition for dominance in the global chip market.
In addition to the popular Galaxy smartphones and televisions, Samsung’s Samsung Electronics division also produces most of the world’s memory chips and has a significant share in the production of high-end semiconductors. These are extremely lucrative business areas for the company: “Nikkei Asia” recently reported that Samsung Electronics will see a 15-fold profit increase for the second quarter compared to the previous year, thanks to a recovering memory chip market.
What Impact Could the Strike Have?
Samsung itself remains confident that the current strike will not have significant consequences. If it does, however, it could affect not only the company but also the global market and numerous consumers. Chips and semiconductors are now used in all sorts of technical products, such as phones, household appliances, and cars. If their production is interrupted, it could potentially impact the production and availability of a wide range of goods. Supply bottlenecks, longer wait times, or changing prices could result for consumers.
Whether it will actually come to that remains to be seen and depends on the specific duration of the strike at Samsung. It could last for days or weeks. Alternatively, interruptions and renewed work stoppages are conceivable. For the working population in South Korea, this is part of their DNA. As “The Diplomat” wrote, one can speak of a veritable protest culture in the Asian country. According to Statista, 355,000 cumulative workdays were lost to strikes in 2023 alone, marking a slight increase over 2022.