Samsung’s South Korean labour union ready for indefinite strike, threatens critical component production

Samsung Electronics Co’s labour union, comprising over 28,000 workers, has initiated an indefinite strike, posing a significant threat to the production capabilities of the world’s largest memory chip maker.

The strike, which began as a three-day walkout demanding better pay, has now escalated into the largest organized labour action in Samsung’s history. Thousands of workers rallied outside Samsung’s chipmaking complexes near Seoul, marking a dramatic standoff with Korea’s biggest company.

In response to the strike, Samsung’s management has been accused by the union of avoiding dialogue and exacerbating tensions. The union has warned of disruptions to the production line of critical components, asserting that management will eventually be compelled to return to negotiations.

Samsung’s shares in Seoul dipped slightly following news of the strike, reflecting concerns about potential manufacturing disruptions. While much of Samsung’s production is automated, any interruptions could impact critical operations, especially as the company seeks to secure partnerships like the one with NVIDIA Corp. for high-bandwidth memory, crucial for competing in AI technologies against rivals like SK Hynix Inc.

Preparations for the strike have been extensive, with the union gearing up for weeks after failed negotiations over pay and vacation policies last month. This move marks a significant escalation from a brief single-day strike in June, which was unprecedented in Samsung’s 55-year history.

The union’s strategy aims to amplify their demands by directly affecting production at Samsung’s advanced chip facilities. Simultaneously, the strike coincides with Samsung’s major product launch event in Paris, where the company is expected to unveil new foldable phones and wearable devices featuring AI and innovative health-tracking features.