For the first time, workers at Samsung, the conglomerate that dominates the South Korean economy, went on strike on Friday.
The move comes as Samsung Electronics struggles to regain its lead in the memory chip manufacturing business, a critical component in 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 report to work on Friday for a planned one-day strike. Union representatives said multiple rounds of negotiations over pay increases and bonuses had failed.
“The company does not value the union as a bargaining partner,” said Lee Hyun Kuk, vice president of the Samsung National Electronics Union, the largest of the company’s five labor groups. He says he represents 28,000 members, about a fifth of Samsung’s global workforce, and that nearly 75 percent voted in favor of a strike in April.
Mr. Lee said unionized workers received no bonuses last year, while some had received bonuses of up to 30 percent of their salaries in the past. “It looks like we took a 30 percent pay cut,” he said. The average union worker earned about 80 million won last year, or about $60,000, 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 strike.
The work stoppage was not expected to affect Samsung’s manufacturing output. It was timed to fall between a national holiday and the weekend, on a day that many people in South Korea planned to take as a vacation. It was unclear how many workers would take part in the action. At a small demonstration outside Samsung’s headquarters in Seoul on Friday morning, workers gathered as organizers played protest songs over loudspeakers.
Still, it was an awkward moment for the company, which has been trying to assure customers and investors that its chip business can meet the demands of the artificial intelligence boom.
“Samsung has been a highly respected company in the memory semiconductor industry and has been a leader for decades. But they lost technological leadership to their competitors,” said Nam Hyung Kim, an analyst at equity research firm Arete Research. “The union strike is nothing compared to many of the problems they are facing right now,” Mr. Kim said.
While so-called logic chips make computers run, memory chips allow them to store information. They’re in everything from smartphones to refrigerators. Advanced computers use many of both types of chips, and generative AI systems rely on extra-strong, 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 about $1.4 billion in profits from its chip division in the first quarter of this year.
But that followed four straight quarters of losses. Samsung ended last year with its weakest profits in more than a decade.
Despite the losses, Samsung remained the world’s largest memory chip maker by revenue and market share last year, according to TrendForce, a market research firm. But earlier this year, local rival SK Hynix claimed the top spot in the market for next-generation high-bandwidth memory chips just as demand for them took off. Companies developing artificial intelligence systems like Nvidia rushed to buy them. Analysts say SK Hynix anticipated this lawsuit before Samsung. Samsung’s foundry business, which makes chips designed by other companies, is also lagging behind its rivals.
The result was the largest deficit in the company’s history, according to comments Jun Young-hyun made to colleagues when he took over leadership of Samsung’s chip division last month after an executive restructuring.
Jun previously led Samsung’s chip business as it overtook Intel as the world’s largest chipmaker by revenue. And he launched his battery arm after the company discontinued a line of smartphones after several spontaneously exploded.
A Samsung representative said the company expected to triple its production of high-bandwidth memory products from last year and double it again in 2025. The company said it planned to invest about $200 billion by 2042 in a new semiconductor industrial complex. south of Seoul that was being developed by the government, and which planned to spend $40 billion on facilities in Texas.
This time, Jun’s quest for a comeback comes as Samsung tries to overcome years of uncertainty as its chief executive, Lee Jae-yong, was caught up in a corruption scandal that led to the ouster of former president Park Geun-hye.
Lee, South Korea’s richest person, according to Bloomberg News, is a descendant of the family that founded Samsung, the largest of the family-owned conglomerates known as chaebol that have transformed South Korea into an export superpower and influence nearly every industry. facets of its economy. society.
In February, he was acquitted of additional charges related to a merger that helped him secure control of the company. Lee’s legal troubles have kept Samsung’s influence over South Korea’s economy and politics in the spotlight.
Samsung was founded in 1938 by Mr. Lee’s grandfather, Lee Byung-chul, as a store selling vegetables and dried fish. He quickly expanded and founded 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 walked off the job in protest at the government’s plans to increase the number of medical students admitted. Last spring, thousands of construction workers demonstrated over discontent with the president’s labor policies.
For decades, Samsung was known for its aversion to organized labor, and unions have organized the company’s workers only in recent years. Mr. Lee said some employees had expressed fear of joining the union.
“Our goal on Friday is not to disrupt the production line, but rather to send a message to management that we have reached a certain level of maturation,” Mr. Lee said.
After the April vote, the union held multiple protests. In an attempt to rally support from the public, he planned the events to look like a street festival and arranged for K-pop singers to entertain the crowd.
Since last week, when the union announced the day of the strike, a bus draped with a banner with the union’s protest slogan: “Labor oppression, union oppression, we will not tolerate it anymore!” – has been parked in front of Samsung’s offices, near Seoul’s posh Gangnam district.
The workers have agreed to collectively take the day off and then return to work, but are prepared to take additional days in the future if they can’t reach an agreement with the company, Lee said.