Samsung Electronics workers strike for the first time ever

Samsung Electronics workers went on a strike on Friday for the very first time in the company’s history. The move comes at a time when the Korean corporation faces increased competition from other chipmakers, particularly as demand for AI chips grows.

The National Samsung Electronics Union (NSEU), the largest of the company’s several unions, called for the one-day strike at Samsung’s Seoul office building as negotiations over pay bonuses and time off hit a standstill. The New York Times reports that the majority of striking workers come from Samsung’s chip division. (Samsung Electronics is technically only a subsidiary comprising its consumer tech, appliances, and semiconductor divisions; Samsung itself is a conglomerate that controls real estate, retail, insurance, food production, hotels, and a whole lot more.)

It’s unclear how many of the NSEU’s roughly 28,400 members participated in the walkout. Even so, multiple outlets are reporting that the walkout is unlikely to affect chip production or trigger shortages. Union leaders told Bloomberg that further actions are planned if management refuses to engage.

That said, the fact that it’s happening at all is awkward timing for Samsung, particularly due to tensions with the chipmaking portion of its business.

Last year, the division reported a 15 trillion won ($11 billion) loss, leading to a 15-year low in operating profits. The current AI boom played a big role in the massive loss. Samsung has historically been the world leader in making high-bandwidth memory chips — the kind that are in demand right now to power next-gen generative AI features. However, last year’s decline was partly because Samsung wasn’t prepared for increased demand, allowing local rival SK Hynix to take the top spot.

South Korea is no stranger to labor movements, but this strike is also significant simply because it’s Samsung. The company as a whole is responsible for roughly 20 percent of South Korea’s GDP. If Samsung sneezes, the whole country gets a cold. Furthermore, Samsung has a decadeslong history of illegal union busting. In 2020, Lee Jae-yong — then heir, now executive chair of Samsung Electronics — issued an apology and promised to end the company’s “no-union management” policies. How it handles the conflict going forward will be a direct test of that commitment.