Chip Giant Samsung Faces Union Mass Walkout Next Week

Samsung Electronics faces the threat of industrial action next week. The news came days after the world’s top maker of memory chips learnt it had lost its top position in the global foldable phone market to Huawei in the first quarter of this year.

The Samsung union in South Korea, which has about 28,000 workers – over a fifth of the company’s workforce, plans to stage its first-ever walkout over demands for higher wages, union officials said on Wednesday.

The National Samsung Electronics Union (NSEU) said it will stop work for one day on Friday June 7 as part of broader protest measures.

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The announcement was made by union officials at a live-streamed press conference, where they held a banner which read: “We can no longer tolerate labour repression, union repression.”

If the union members collectively take the day off next week, it would mark the first-ever walkout by South Korean workers at the tech conglomerate.

Workers have been intermittently participating in protests in recent weeks outside the company’s offices in the capital city Seoul, as well as outside its chip production site in Hwaseong, south of Seoul.

Extra leave, ‘transparent’ bonuses sought

Responding to a decision by the company to increase wages this year by 5.1%, the union has previously said that it wanted an additional day of annual leave as well as transparent performance-based bonuses.

On Wednesday, the union accused the tech giant of failing to bring a compromise plan to negotiations held the previous day.

Samsung Electronics said in a statement on Wednesday: “We will sincerely engage in discussions with the union.”

Union officials defended the decision to take industrial action at a time when some parts of Samsung’s business are underperforming.

“The company has been saying they are facing crisis all along for the past 10 year[s],” Son Woo-mok, president of NSEU told reporters, but added that the firm should not use it as an excuse not to meet its demands.

The union said all company sites across South Korea would be affected by its June 7 action. NSEU is the biggest of five labour unions at South Korea’s tech giant. It is not clear whether other smaller unions plan to join the action.

Suspicion on motive for strike

Responding to Wednesday’s proposed strike, a coalition of five unions at Samsung affiliates including another Samsung Electronics union questioned the intention behind the strike plan, indicating they would not join the move.

The coalition said in a statement it appears to be part of efforts to join a combative umbrella union, rather than to improve workers’ conditions at the tech company.

The strike announcement comes as Samsung, one of the world’s biggest chipmakers and smartphone makers, appears to be faltering in some areas, including cutting-edge semiconductor chips.

Samsung last week replaced the head of its semiconductor unit saying a new person at the top was needed to navigate what it called a “crisis” affecting the chips industry.

More than 2,000 unionised workers of the South Korean technology giant gathered in Seoul last week to hold a rare rally to demand better wages.

Union membership has increased rapidly after Samsung Electronics in 2020 pledged to put an end to its practices of discouraging the growth of organised labour.

Analysts said the rise in union membership reflects workers’ frustration with a recent slump in Samsung’s competitiveness in businesses such as high bandwidth memory (HBM) chips and due to legal issues facing the tech giant.

In one case the company is battling a prosecution appeal of a decision that found Samsung Electronics’ chairman Jay Y Lee not guilty of fraud and other charges related to a 2015 merger of Samsung companies.

Chairman meets Chinese PM

Lee met with Chinese Premier Li Qiang on Friday and was the only company executive the visiting PM met with during his three-nation summit with leaders from Seoul and Japan.

Lee has been made significant efforts to boost his ties with key Chinese officials, according to a Business Korea report, which said the Samsung boss “has long maintained good relations with prominent Chinese figures, including President Xi Jinping, the Premier, and members of the Politburo.”

“His relationship with President Xi began in 2005 when Xi, then the Party Secretary of Zhejiang Province, visited Samsung Electronics’ Suwon plant. This bond was further strengthened in 2013 when Chairman Lee served as a director at the Boao Forum for Asia,” it said.

Shares of Samsung Electronics closed down 3.1% on Wednesday, compared with the benchmark KOSPI’s 1.7% fall.