Samsung union calls first ever strike after pay negotiations stall | CNN Business

Seoul/Hong Kong
CNN
 — 

A labor union representing tens of thousands of workers at Samsung Electronics in South Korea has called a one-day strike next week, in what would be the first such walkout at the smartphone and chipmaking giant.

The Nationwide Samsung Electronics Union (NSEU) said on Wednesday during a press conference streamed on its official Youtube channel that its 28,000 members — just under a quarter of the company’s total workforce in the country — would strike on June 7, following failed negotiations over pay and bonus arrangements.

“We can no longer afford to see a company that has no will to negotiate,” union representatives said, adding “we will fight for workers’ rights and interests.”

Son Woomok, a union leader, told CNN that many NSEU members worked for Samsung’s flagship semiconductor unit.

“We are demanding transparent and fair performance bonuses and wage increases,” he said in an interview.

“There has never been a proper wage negotiation. It has always been carried out by announcing the (outcome) at the labor-management council, which does not include our union, and the company telling us to accept it,” he added.

In a statement to CNN, a Samsung spokesperson said: “The company remains committed to engaging in good faith negotiations with the union, and is making every sincere effort to come to an agreement.”

The world’s biggest memory chipmaker has had a rough few years. A historic shortage of computer chips during the Covid pandemic was followed by falling demand last year as consumer appetite for electronics remained weak because of global economic uncertainty.

In January, Samsung reported an operating profit of just 6.567 trillion won ($4.8 billion) for 2023, its weakest annual performance since 2009, according to the Wall Street Journal. Samsung also lost its crown as the top smartphone maker globally.

But things are looking up for the company because of the AI boom.

It is optimistic about a resurgence in demand for mobile devices this year, particularly with the rollout of new products, such as AI-powered smartphones.

Last month, Samsung reported a more than 10-fold rise in first-quarter operating profit amid forecasts of high demand for AI and high-end chips, an area in which it competes with Intel (INTC) and Taiwan’s TSMC.

The vast majority of the world’s advanced microchips are made in just two places: Taiwan and South Korea. Taiwan’s industry is larger and more dominant, something South Korea is keen to challenge.