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 making memory chips, a critical component of advanced artificial intelligence systems that are reshaping longtime rivals among global technology companies.
Workers at Samsung’s chip division are expected to make up the majority of those who will not show up to work Friday for a planned one-day strike. Union representatives said several rounds of negotiations over wage increases and bonuses had failed.
“The company does not consider the union as a negotiating partner,” said Lee Hyun Kuk, vice president of the national Samsung Electronics union, the largest of the company’s five labor groups. It says it 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’s 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 representative for Samsung Electronics said the company was trying to reach an agreement with the union, but declined to comment further on the strike.
The work stoppage is not expected to affect Samsung’s manufacturing output. It was timed to fall between a national holiday and the weekend, 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 rally outside Samsung’s headquarters in Seoul on Friday morning, workers gathered as organizers played protest songs through loudspeakers.
Still, it’s a delicate moment for the company as it tries to reassure customers and investors that its chip business can meet the demands of the artificial intelligence boom.
“Samsung is a highly respected company in the memory semiconductor industry and has been a leader for decades. But they have lost their 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 now,” Mr. Kim said.
While logic chips make computers work, memory chips allow them to store information. They are found everywhere, from smartphones to refrigerators. Advanced computers use many of both types of chips, and generative artificial intelligence systems rely on very powerful, high-bandwidth memory chips to create text, images, and other types of content at will. request.
Samsung has been the world’s largest memory chip maker for years and reported a profit of around $1.4 billion from its chip division in the memory chip business. first quarter of this year.
But that followed four straight quarters of losses. Samsung finished last year with its lowest profits in more than a decade.
Despite these losses, Samsung remained the world’s largest memory chip maker in terms of revenue and market share last year, according to TrendForce, a market research firm. But earlier this year, local rival SK Hynix took over the top spot in the market for next-generation high-bandwidth memory chips, just as demand for them was taking off. Companies developing artificial intelligence systems like Nvidia have rushed to buy them. Analysts say SK Hynix anticipated this demand earlier than Samsung. Samsung’s foundry business, which makes chips designed by other companies, also lags behind rivals.
This is the largest deficit in the company’s history, according to remarks Jun Young-hyun made to colleagues when he took over as head of Samsung’s chip division last month after a corporate shakeup. The direction.
Mr. Jun previously led Samsung’s chip business as it overtook Intel to become the world’s largest chipmaker by revenue. And it exhausted its battery arm after the company discontinued a line of smartphones after several spontaneously exploded.
A Samsung representative said the company plans to triple its production of high-bandwidth memory products from last year, and double it again in 2025. The company said it plans to invest approximately $200 billion by 2042 in a new semiconductor industrial complex. south of Seoul, which was being developed by the government and planned to spend $40 billion on facilities in Texas.
This time, Mr. Jun’s quest for a comeback comes as Samsung tries to emerge from several years of uncertainty as its top executive, Lee Jae-yong, was accused in a corruption scandal that led to the impeachment of former President Park Geun-hye.
Mr Lee, South Korea’s richest person, according to BloombergNewsis a scion 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 facet of society.
In February, he was acquitted of additional charges related to a merger that gave him control of the company. Mr. Lee’s legal troubles have kept Samsung’s influence on South Korea’s economy and politics in the spotlight.
Samsung was founded in 1938 by Lee Byung-chul, Mr. Lee’s grandfather, to sell vegetables and dried fish. It expanded quickly and established Samsung Electronics in 1969 to make televisions and refrigerators and, soon after, semiconductors.
Strikes in South Korea are not uncommon. Since February, more than 10,000 young doctors have walked off the job to protest government plans to increase the number of medical students admitted. Last spring, thousands of construction workers gathered to protest the president’s labor policies.
For decades, Samsung was known for its aversion to organized labor, and unions have only organized workers at the company in recent years. Mr Lee said some employees had expressed fears about joining the union.
“Our goal on Friday is not to affect 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 several rallies. In a bid to attract public support, he planned the events to resemble a street festival and arranged for K-pop singers to entertain the crowd.
Since last week, when the union announced the strike day, a bus was draped with a banner bearing the union’s protest slogan: “Worker oppression, union oppression, we will no longer accept this!” – were parked outside Samsung’s offices near Seoul’s trendy Gangnam district.
The workers agreed to collectively take a day off and then return to work, but are prepared to take additional days in the future if they cannot reach an agreement with the company, Mr Lee said.
