Samsung workers go on strike for the first time

SEOUL, South Korea — Workers at Samsung, the conglomerate that dominates South Korea’s economy, went on strike for the first time on Friday.

The move comes as Samsung Electronics Co. Ltd. strives to regain its edge in making memory chips, a key component in advanced artificial BroadCast Unitedligence systems that are reshaping the long-running competitive landscape among global technology companies.

Workers at Samsung’s chip unit are expected to make up the majority of those striking on Friday for a day as union representatives say multiple rounds of talks over pay raises and bonuses have broken down.

“The company does not consider the union as a negotiating partner,” said Lee Hyun-guk, vice chairman of Samsung Electronics National Labor Union, the largest of Samsung’s five unions. The union represents 28,000 members, about a fifth of Samsung’s global workforce, and nearly 75 percent voted in favor of the strike in April, the union said.

Lee said union workers did not receive bonuses last year, while some workers in the past received bonuses of up to 30% of their wages. “It feels like our wages have been cut by 30%,” he said. He said the average salary of union workers last year was about 80 million won, or about $60,000 before bonuses.

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 shutdown is not expected to affect Samsung’s manufacturing output. The shutdown is scheduled between a national holiday and a weekend, when many people in South Korea plan to take a day off. It is unclear how many workers will take part in the action. At a small rally in front of Samsung’s headquarters in Seoul on Friday morning, workers gathered as organizers played protest songs on a loudspeaker.

However, it comes at an awkward time for the company as it has been trying to reassure customers and investors that its chip business can keep up with the demand from the artificial BroadCast Unitedligence boom.

“Samsung is a well-respected company in memory semiconductors and has been a leader for decades. But their technological leadership has been taken away by their competitors,” said Nam Hyung Kim, an analyst at Arete Research, an equity research firm. “The union strike is nothing compared to the many problems they are facing now,” Kim said.

Logic chips make computers run, while memory chips allow computers to store information. Memory chips are found in everything from smartphones to refrigerators. Advanced computers use large quantities of both types of chips, and generative AI systems rely on ultra-powerful, high-bandwidth memory chips to create text, images, and other types of content on demand.

Samsung has for years been the world’s largest memory chip maker, and its chip division made about $1.4 billion in profit in the first quarter of this year.

But Samsung has suffered losses for four consecutive quarters. Last year, Samsung’s profit was the lowest in more than a decade.

Despite the losses, Samsung was still the world’s largest memory chip maker by revenue and market share last year, according to market research firm TrendForce. But this year, local rival SK Hynix has taken the top spot in the market amid a surge in demand for next-generation high-bandwidth memory chips. Companies such as Nvidia that develop artificial BroadCast Unitedligence systems are scrambling to buy the chips. Analysts say SK Hynix anticipated the demand earlier than Samsung. Samsung’s foundry business, which makes chips designed by other companies, also lags behind its competitors.

That’s the biggest deficit in the company’s history, according to comments Chun Young-hyun made to colleagues when he took over as leader of Samsung’s chip division last month following an executive reshuffle.

Mr. Jeon led Samsung’s chip business when it surpassed Intel Corp. to become the world’s largest chipmaker by revenue. He took charge of the company’s battery division after it halted production of several smartphones that spontaneously exploded.

A Samsung representative said the company expects production of high-bandwidth memory products to triple from last year and double again by 2025. The company said it plans to invest about $200 billion by 2042 in a new semiconductor industrial complex south of Seoul that the government is developing, and plans to invest $40 billion in facilities in Texas.

This time, Chun is seeking a comeback as Samsung tries to emerge from years of uncertainty, with its top executive Jay Y. Lee embroiled in a corruption scandal that led to the impeachment of former President Park Geun-hye.

Lee Kun-hee is South Korea’s richest man, according to Bloomberg, and he is one of the founders of Samsung Group, South Korea’s largest family-owned conglomerate, which built the country into an export superpower and influences nearly every aspect of society.

Lee Kun-hee was acquitted in February of additional charges related to a merger that helped him consolidate control of the company. His legal troubles have put a spotlight on Samsung’s influence over South Korea’s economy and politics.

Samsung was founded by Lee Kun-hee’s grandfather, Lee Byung-chul, as a store selling vegetables and dried fish in 1938. The company expanded rapidly and was established as Samsung Electronics in 1969, producing televisions and refrigerators, and soon after, semiconductors.

Strikes are not uncommon in South Korea. More than 10,000 young doctors have gone on strike since February to protest a government plan to increase medical school admissions. Last spring, thousands of construction workers rallied over the president’s labor policies.

Samsung has been known for decades for its aversion to unions, which have only begun organizing workers within the company in recent years. Lee said some employees have expressed fear of joining a union.

“Our goal on Friday was not to impact the production line, but to send a message to management that we have reached a certain level of maturity,” Lee said.

The union held several rallies after the April vote, which it styled to feel like street festivals and featured K-pop singers to entertain the crowds in an effort to rally public support.

A bus draped with a banner bearing the union’s protest slogan, “Labor oppression, union oppression, we can’t take it anymore!” has been parked in front of Samsung’s offices in Seoul’s fashionable Gangnam neighborhood since the union announced the strike last week.

Mr. Li said the workers had agreed to take a collective day off and then return to work, but they were prepared to take additional days off in the future if they could not reach an agreement with the company.

This article was originally published on New York Times.