Samsung workers go on strike demanding higher wages during growing AI competition

Samsung Electronics workers launched a three-day strike on Monday, demanding higher wages. The workers union also hinted at further action if South Korea’s biggest Chip and smartphone maker did not meet its demands.

Also Read: Samsung expects a 15-fold jump in profitability, thanks to AI 

The National Samsung Electronics Union (NSEU) has also demanded an extra day of annual leave and a restructuring of the employee bonus system. According to a report by Reuters, the NSEU has almost 30,000 members, which account for one-fourth of the company’s total workforce in South Korea.

Samsung workers strike may not disrupt operations

Last month, the union staged a worker’s walkout on annual leave issues, but according to Samsung, it had zero impact on operations. The company said there were no disruptions in production. The union representatives said about 3,000 workers attended the protest in the rain at Samsung’s headquarters in Seoul.

Also Read: Korea’s SK Group will invest $58 billion in AI chip manufacturing

Workers’ low participation in the strike and automated processes at the factories means the strike will have no significant impact on output, said the report. However, production aside, the strike signals a level of dissatisfaction among workers at a time when the chip manufacturing sector is adopting artificial intelligence.

The union said that 6,540 workers will protest this week at manufacturing facilities and production development. Workers who work on automated lines will also be part of the strike. The union also hinted at the possibility of operations being affected due to the strike.

NSEU’s president, Son Woo-mok, said the union is only five years old and did not have enough time to educate its members on the issues. He also rejected media reports regarding low participation by workers. He 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.”

Union vice president Lee Hyun-kuk said that if Samsung does not come up with better proposals, there could be more strikes.

Union is also demanding a more transparent bonus system

Union officials also dispute the bonus system and are demanding equality among base-line workers and executives. They say that bonuses for junior workers are not properly based on operating profit of the firm as cost of capital is deducted from it before calculating the bonus. 

On the other hand, bonuses for executives are determined by personal performance achievements. Park Jun-ha, a Samsung chip packaging engineer, said he was unsatisfied with the bonus system due to its opaque nature. Jun joined the tech giant in January. He added, “I was telling people that I was proud to work at Samsung, but the truth is I am not.”

Also Read: US considering more regulations to limit China’s access to AI chips

Samsung’s stock price has struggled in the face of competition, such as that of rival SK Hynix. Union representatives said that Samsung’s struggles are due to slow progress in high-bandwidth memory (HBM) chips. The semiconductor chips can handle a lot of data quickly and are important for AI processors.

NSEU’s membership has grown significantly, as Samsung previously said in 2020 that it would not discourage organized labor. However, the union’s voice has since been growing as Samsung struggles with competition. Samsung has proposed flexibility in annual leave and pay, but it still falls short of the demands made by the union, said Lee. 

Cryptopolitan reporting by Aamir Sheikh