Home » Samsung workers strike: A call for fair pay and perks amid AI boom

Samsung workers strike: A call for fair pay and perks amid AI boom

by Simon Jones Tech Reporter
8th Jul 24 3:38 pm

Samsung Electronics workers initiated a three-day strike on Monday, demanding better pay and additional benefits.

The National Samsung Electronics Union (NSEU), representing approximately 30,000 members, also seeks an extra day of annual leave for unionized workers and a revision of the employee bonus system.

According to analysts, the strike is unlikely to significantly impact output at the world’s largest memory chipmaker due to low participation and automated production.

However, it indicates a decline in staff loyalty during a crucial period for the chip industry as tech companies increasingly adopt artificial Intelligence.

Last month, the union’s first industrial action involved coordinating annual leave for a mass walkout, which Samsung claimed did not affect business operations. Samsung declined to comment on the current strike. The union reported that 6,540 workers are striking this week, primarily at manufacturing sites and in product development. The strike includes workers who monitor automated production lines, potentially affecting operations.

Union’s growing influence

Approximately 3,000 strikers attended a rainy rally near Samsung’s headquarters in Hwaseong, south of Seoul. Union president Son Woo-mok disputed media reports of low participation, explaining that the five-year-old union had insufficient time to educate members.

National Samsung electronics union president Son Woo-Mok said, “Education about labor unions … has not been enough. But I don’t think this participation is low because our union is still young compared to other unions.”

Lee Hyun-kuk, the union’s vice president, stated that further strikes could occur if Samsung does not improve its proposals. According to Lee, Samsung has responded by offering flexibility in pay and annual leave conditions but does not meet the union’s demands for increased pay and leave.

The union also seeks equality in the bonus system, noting that bonuses for rank-and-file workers are calculated by deducting the cost of capital from operating profit. In contrast, executive bonuses are based on personal performance goals.

“I was telling people that I was proud to work at Samsung, but the truth is I am not,” said Park Jun-ha, a 20-year-old engineer on Samsung’s chip packaging lines who joined the firm in January, expressing dissatisfaction with the “opaque” bonus scheme.

Samsung’s financial performance

Since Samsung pledged in 2020 to stop discouraging organized labour, union membership has grown, and its demands are gaining attention just as Samsung faces challenges in the competitive AI chip market, analysts said.

Samsung’s share price performance has lagged behind rival SK Hynix, with union officials attributing Samsung’s AI struggles to slow development in high bandwidth memory (HBM) chips, which are in high demand for AI processors.

Despite these challenges, Samsung estimated a more than 15-fold increase in second-quarter operating profit on Friday, driven by rebounding chip prices amid the AI boom. Its share price rose 0.2% on Monday afternoon, reaching its highest point since January 2021, following a 6.9% jump last week on preliminary quarterly earnings that surpassed analyst expectations.

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