The National Samsung Electronics Union (NSEU), whose roughly 30,000 members make up almost a quarter of the firm’s South Korean workforce, said it has decided to continue with the striking because management has shown no indication of holding talks after a strike that started on Monday.

Samsung workers union continued strike

“We haven’t spoken to management since we started the strike on Monday,” said Lee Hyun-kuk, the union’s vice president.

The union said it would extend the strike initially planned to last three days through Wednesday. As per Lee, the union found its strike has disrupted production on certain chip lines such as with equipment running more slowly.

Production disruption at Samsung

Samsung previously said the strike has caused no disruption to production. It did not immediately respond to a request for comment on Wednesday.

The union is becoming more vocal and seeking to be treated as an equal partner, adding to challenges at the world’s biggest memory chipmaker which is struggling to navigate competition in chips used for artificial intelligence (AI) applications.

As per analysts, it would be difficult to verify whether the strike has disrupted production unless the union provides details of wafers and processes.

Samsung workers union increasing members

Lee said about 6,500 workers have been participating in the strike and that the union will encourage more members to join.

Union officials have disputed reports of low participation, stating that the five-year-old body did not have enough time to educate members about the labor issues. The union held a training session on Tuesday and will conduct another on Wednesday.

Samsung union’s demands

The union said it has revised demands to include a 3.5% increase in base salary and, instead of an extra day’s annual leave, a day off to mark the union’s founding. Lee said the management previously offered a 3% rise in base salary but the union wants 3.5% to better reflect inflation.

Stock update

Samsung’s share price was down 0.1% versus a 0.2% decline in the benchmark KOSPI at 0139 GMT.

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National Samsung Electronics Union, the largest of the tech giant’s several unions with some 28,000-plus workers says it’s escalating things. The reason the Samsung union gave for rally is because of a breakdown in workers pay talks, after initially seeking a less dramatic resolution.

Samsung workers union

Samsung Electronics Co. workers are expected to walk off assembly lines Monday, beginning the biggest organized labor action in the South Korean conglomerate’s half-century history.

The largest union at Samsung, the nation’s biggest company has spent the past few weeks preparing for the three-day walkout, after negotiations over pay and vacation time collapsed last month. This envisioned action marks an escalation from a single-day strike in early June, the first in Samsung’s 55 years of existence. It’s intended to send a message by disrupting production at one of the company’s most advanced chip facilities, union leaders say.

Union rally to stop production

As per Lee Hyun-kuk, deputy secretary-general of the union, the labor union aims to gather up to 5,000 people for rallies outside Samsung’s semiconductor plants in Hwaseong, about 38 kilometers south of Seoul, at 11 a.m. on Monday. It’s unclear how many workers will actually walk off the job, and markets have so far remained calm. Still, the risk is that the unprecedented action at Samsung may hurt the country’s best-known and wealthiest corporate name and spur similar responses across the tech industry.

“Our goal for this walkout is to disrupt production,” said union leader Son Woo-mok.

Critical time for Samsung

For Samsung, world’s biggest maker of memory chips it can ill-afford turmoil within its ranks at a critical time. It’s now pulling out the stops to convince Nvidia Corp. to use its high-end AI memory chips a prerequisite for staking a larger claim on a booming AI market. In May, it abruptly replaced the head of its semiconductor division, which since 2023 has seen SK Hynix Inc. dominate the crucial high-bandwidth memory, or HBM, chip arena.

“The timing of this strike is particularly critical as it coincides with ongoing semiconductor supply chain challenges,” said Billy Leung, an investment strategist at Global X Management Co., a member of the Mirae Asset Financial Group. Samsung accounts for about 20% of the global DRAM market and around 40% of NAND flash, which is used in smartphones and servers. “Any disruption in Samsung’s operations could have a ripple effect.”

Samsung’s new foldable phones

This week, Samsung’s preparing to unveil new foldable phones and watches as well as a smart ring in Paris ahead of the Olympics, in an attempt to forestall a challenge from Apple Inc. on its global market lead. In Samsung’s favor however is an anticipated rebound in global memory and electronics demand from historic post-Covid era depths: the company on Friday posted a 15-fold surge in earnings, but off a very low 2023 base.

Representatives for Samsung declined to comment on Friday.

South Korea’s Samsung workers strike

Samsung Electronics has long avoided the kind of ground-up turmoil that’s plagued many of Korea’s leading companies from Hyundai Motor Co. to Ssangyong Motor Co. Labor action in the past has occasionally turned violent. Analysts have credited Samsung’s tight control of labor activism as a reason for its success, helping the company dominate the electronics sector from its perch in Suwon for well over a decade. Lee Kun Hee, late chairman of Samsung and father of current leader Jay Y. Lee, went to great lengths to prevent unions from forming.

Samsung’s Q2 operating profit

On Friday a more than 15-fold rise was seen in Samsung estimated Q2 operating profit. This was due to rebounding semiconductor prices driven by the AI boom. This lifted Samsung’s lifted earnings from a low base a year ago. 

Samsung’s share price

Samsung share closed at a price of 87,400 KRW up 0.34% today. Though, Samsung’s share price performance has been lagging behind South Korean chip rival SK Hynix.

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