Production workers at Samsung Electronics have initiated a reported three-day labor disruption at the high tech, semiconductor and consumer electronics facilities in South Korea.

According to a report from Bloomberg, The National Samsung Electronics Union (NSEU) with upwards of 30,000 members has organized this action after ongoing talks did not satisfy worker demands. The labor union indicated that upwards of 6,500 workers signed-up to participate in this action, but reports indicate the number of striking workers in likely to be about 3,000 workers.

The labor union has targeted Samsung’s largest semiconductor chip production plant located south of Seoul, and reportedly includes workers who assemble, monitor or manage production semiconductor chip productions operations and automation.

This disruption reportedly occurred after ongoing labor negotiations related to compensation levels, vacation time, and the calculation of worker performance bonuses reportedly broke down. Bonus payments make up a significant portion of production worker compensation at Samsung.

Increased labor activism involving Samsung dates back to 2021 and 2022. Our Supply Chain Matters commentary in March of 2022 highlighted a published report by The Wall Street Journal indicating that that nearly half of the company’s global workforce, from semiconductor engineers to product designers, were seeking the largest base-salary increase in this company’s history.

This week’s action follows a one day labor strike that occurred in June which is noted as the first labor disruption in this technology company’s 55 year existence. Samsung has reportedly been able to avoid the labor activism and sometimes violent worker turmoil that has occurred among South Korea’s largest companies such as Hyundai Motor.

Bloomberg indicates that Samsung can ill-afford turmoil within its ranks- or production snarls-at a critical time.” Last week, the company reported a 15-fold increase in Q2 operating profit, fueled by a rebound in semiconductor and memory chip prices along with increased demand for AI related chips.

High tech and consumer electronics supply networks will need to monitor theses ongoing labor actions at Samsung. They are another manifestation of our research arm’s prediction that the increased labor activism that impacted multiple industry supply chains in 2023 will extend into 2024.

 

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