Key Points:
- The National Samsung Electronics Union (NSEU), representing about 28,000 members, is staging the first-ever union walkout at Samsung Electronics.
- Analysts, including those from TrendForce, expect minimal impact on DRAM and NAND Flash memory chip production.
- The strike’s timing, coinciding with a public holiday, and the high level of production automation are factors reducing potential disruption.
- A coalition of five unions, including another smaller Samsung Electronics union, has questioned the strike’s intent and will not join the action.
Samsung Electronics (005930.KS) is set to experience its first-ever union walkout on Friday, organized by the National Samsung Electronics Union (NSEU). The union, representing around 28,000 members, equating to more than a fifth of the company’s workforce, is protesting over pay and working conditions. Despite the significance of this labor action, analysts predict it will have a minimal impact on chip production.
The NSEU has announced that the walkout will last a day as part of a broader series of protest measures. However, market research firm TrendForce anticipates that the strike will not affect the production of DRAM and NAND Flash memory chips nor lead to shipment shortages.
TrendForce explained that the walkout involves more workers at Samsung’s headquarters in Seoul than those directly involved in production. Additionally, the strike’s timing, coming a day after a public holiday when many employees had already taken leave, and the high level of automation in production processes further mitigate potential disruptions.
In recent weeks, workers have intermittently protested outside Samsung’s offices in Seoul and its chip production site in Hwaseong, south of the capital. The union’s grievances stem from Samsung’s decision to increase wages by 5.1% this year. The NSEU demands an additional day of annual leave and more transparent performance-based bonuses. Samsung Electronics has responded by stating its willingness to “sincerely engage in discussions with the union.”
According to the union, the June 7 action was expected to affect all company sites across South Korea. NSEU is the largest of five labor unions at Samsung. However, last week, a coalition of five unions at Samsung affiliates, including a smaller Samsung Electronics union, questioned the strike’s intent and indicated they would not participate. This lack of unanimous support among unions could further dilute the walkout’s impact.
Samsung union membership has surged since the company pledged in 2020 to cease practices aimed at discouraging organized labor. This shift marks a significant cultural change within the company, historically known for its resistance to unionization.
