Samsung Electronics union threatens first-ever strike over low pay

Samsung Electronics, South Korea’s largest company, is already lagging behind its rivals in the all-important semiconductor business. Now, it might also be hit by a huge worker strike.

The National Samsung Electronics Union, the largest union in the company with around 28,000 employees, announced plans to go on strike on Wednesday morning after long negotiations with management stalled.

“We can’t stand persecution against labor unions anymore. We are declaring a strike in the face of the company’s neglect of laborers,” a union representative said during a news conference.

Samsung Electronics, the world's largest maker of memory chips, smartphones, and televisions, says it will continue to talk with the union, which has demanded a 6.5% pay rise and a bonus tied to the firm’s earnings.

But if the strike does happen, it will be the first such collective action at the company since it was founded 55 years ago.

Samsung Group only allowed unions to represent its workers in 2020 after its Chairman was prosecuted for market manipulation, bribery, and union-busting tactics. Samsung founder Lee Byung-Chul, who died in 1987, was adamantly opposed to unions – he once said he would never allow them "until I have dirt over my eyes.”

In March, Korean media already reported that a record number of Samsung workers – especially from the chip division – were joining a labor union over low salaries and bonuses.

Most newcomers are young progressive workers in their 30s who tend to be more vocal about their requests to the company.

The National Samsung Electronics Union, the largest of five unions at the company, now has about 28,000 members – the count has tripled since December 2023.

That’s unsurprising: the average salary at Samsung Electronics declined 11% to 120 million won ($91,000) last year due primarily to a weak performance across the board. In other words, workers think they shouldn’t solely be responsible for the firm’s economic health.

The union said it would at first hold a one-day protest by asking all its members to use their paid leave on June 7th, and further action may follow. Analysts have warned that a full-scale strike could affect Samsung Electronics’ computer chip manufacturing.

Demand for advanced chips that power artificial intelligence systems has surged due to the success of ChatGPT and other generative AI products.

Semiconductors are South Korea's leading export and hit $11.7 billion in March, accounting for a fifth of South Korea's total exports. But Samsung Electronics now has to play catchup with SK Hynix, a local rival, in producing the memory chips.