Workers at Samsung, the conglomerate that dominates the South Korean economy, went on strike for the first time on Friday.
The action comes as Samsung Electronics fights to regain its lead in the business of making memory chips, a crucial component in the advanced artificial intelligence systems that are reshaping long-standing rivalries between global technology companies.
Workers at Samsung’s chip division were expected to make up the majority of those who will not show up for work on Friday because of a planned one-day strike. Union officials said several rounds of negotiations over wage increases and bonuses had failed.
“The company does not value the union as a bargaining partner,” said Lee Hyun Kuk, vice president of the Nationwide Samsung Electronics Union, the largest of the company’s five unions. It says it represents 28,000 members, about a fifth of Samsung’s global workforce, and that nearly 75 percent voted to strike in April.
Mr. Lee said union employees received no bonuses last year, while some have received bonuses of up to 30 percent of their salary in the past. “It feels like we’ve taken a 30 percent pay cut,” he said. The average union employee earned about 80 million won, or about $60,000, last year before incentives, he said.
A Samsung Electronics representative said the company was trying to reach an agreement with the union but declined to comment further on the details of the negotiations.
The work stoppage had no impact on Samsung’s production or business activities, the company representative said. The timing was between a national holiday and the weekend, a day that many people in South Korea wanted to take as a vacation. It was not clear how many workers took part in the action. A small group of workers gathered outside Samsung’s headquarters in Seoul on Friday morning as organizers played protest songs over loudspeakers.
Still, it was bad timing for the company as it sought to convince customers and investors that its chip business could meet the demands of the artificial intelligence boom.
“Samsung is a highly respected company in the memory semiconductor sector and has been a leader for decades. But they have lost technology leadership to competitors,” said Nam Hyung Kim, an analyst at equity research firm Arete Research. “The union strike is nothing compared to many problems they are currently facing,” Mr. Kim said.
While so-called logic chips make computers run, memory chips enable information to be stored. They can be found in everything from smartphones to refrigerators. Advanced computers use many chips of both types, and generative artificial intelligence systems rely on particularly powerful, high-bandwidth memory chips to create text, images, and other types of content on demand.
Samsung has been the world’s largest memory chip maker for years and reported a profit of around $1.4 billion from its chip division in the first quarter of this year.
But this was followed by four consecutive quarters of losses. Samsung ended last year with its weakest profit in more than a decade.
Despite losses, Samsung remained the world’s largest memory chip maker in terms of sales and market share last year, according to TrendForce, a market research firm. But earlier this year, its local rival SK Hynix captured the top spot in the market for the next generation of high-bandwidth memory chips just as demand for them was rising. Companies like Nvidia, which develop artificial intelligence systems, rushed to buy them. Analysts say SK Hynix anticipated this demand earlier than Samsung. Samsung’s foundry business, which produces chips developed by other companies, is also lagging behind the competition.
The result was the largest deficit in the company’s history, according to comments Jun Young-hyun made to colleagues when he took over as head of Samsung’s chip division last month after an executive shakeup.
Mr. Jun previously led Samsung’s chip business as the company overtook Intel as the world’s top chipmaker by revenue. And he led the battery arm after the company discontinued a number of smartphones after several spontaneously exploded.
A Samsung representative said the company expects to triple its production of high-bandwidth memory products compared to last year and double it again by 2025. The company said it planned to invest about $200 billion by 2042 in a new semiconductor industrial complex south of Seoul being developed by the government, and that it planned to spend $40 billion on facilities in Texas.
Samsung Chief Executive Lee Jae-yong was acquitted of merger-related charges in February.Credit…Yonhap/EPA, via Shutterstock
This time, Mr. Jun is aiming for a comeback as Samsung tries to put behind it years of uncertainty while its top executive, Lee Jae-yong, was embroiled in a corruption scandal that led to the impeachment of former President Park Geun-hye.
Mr. Lee, South Korea’s richest person, is, according to Bloomberg News, a scion of the family that founded Samsung, the largest of the family conglomerates known as chaebol that have turned South Korea into an export superpower and influences almost every aspect of society.
In February, he was cleared of additional charges related to a merger that helped him gain control of the company. Mr. Lee’s legal troubles have put Samsung’s influence on South Korea’s economy and politics in the spotlight.
Samsung was founded in 1938 by Mr. Lee’s grandfather, Lee Byung-chul, as a vegetable and dried fish store. The company expanded quickly, founding Samsung Electronics in 1969 to make televisions and refrigerators and, soon after, semiconductors.
Labor strikes in South Korea are not uncommon. Since February, more than 10,000 young doctors have quit their jobs in protest against the government’s plans to increase the number of medical students admitted. Last spring, thousands of construction workers demonstrated their dissatisfaction with the president’s labor policies.
For decades, Samsung was known for its antipathy toward organized labor, and only in recent years have unions organized workers at the company. Mr Lee said some employees had expressed fear of joining a union.
“Our goal on Friday is not to influence the production line, but rather to send a message to management that we have reached a certain level of maturity,” Mr Lee said.
After the April vote, the union held several rallies. To enlist the public’s support, they planned the events to look like a street party and had K-pop singers entertain the audience.
Since last week, when the union announced the strike day, a bus draped with a banner bearing the union’s protest slogan – “Labor repression, union repression, we won’t put up with this anymore!” – was trending outside the Samsung offices near Seoul’s Parked in Gangnam district.
The workers agreed to collectively take the day off and then return to work, but were willing to take additional days in the future if they could not come to an agreement with the company, Mr. Lee said.
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2024-06-07 02:55:45
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