July 15, 2024 – Amidst mounting internal turmoil, Samsung Electronics is grappling with a series of crises that have shaken the tech giant to its core. Beyond the headlines of a nationwide strike led by the powerful Samsung Electronics National Union (SENU), whispers of employee defections to SK Hynix have added fuel to the fire.
An anonymous chip engineer from Samsung Electronics, speaking to the Financial Times under condition of anonymity, revealed a profound sense of pessimism pervading the company’s ranks. “The atmosphere is bleak,” they lamented, citing Samsung’s lag behind SK Hynix in High Bandwidth Memory (HBM) development and the persistent gap with Taiwan Semiconductor Manufacturing Company (TSMC) in wafer foundry services.
The dissatisfaction with compensation is widespread, with employees feeling their paychecks pale in comparison to those at SK Hynix. This discontent has fueled a growing exodus sentiment, as workers contemplate switching sides to greener pastures.
The HBM3E product, a key area of focus for Samsung, has encountered setbacks, notably failing to secure validation from NVIDIA, a major buyer in the HBM market. Moreover, the company’s advanced 3nm Gate-All-Around (GAA) process technology continues to struggle with low yield rates and suboptimal power efficiency, further dampening morale.
The financial markets have mirrored Samsung’s struggles, with the company’s share price rising a mere 10% year-to-date (in local currency terms), while SK Hynix has surged 61.84%, and TSMC has soared over 75%. These numbers speak volumes about investor confidence in the respective firms’ outlooks.
At the heart of both the labor unrest and the exodus intention lies the underperformance of Samsung’s Device Solutions (DS) division, which encompasses both memory and foundry operations. Last year’s losses in the DS division translated into zero performance bonuses for employees, a significant blow to their take-home pay.
SENU, which boasts a substantial membership base from the DS division, has emerged as a formidable force in the ongoing struggle for better working conditions and fairer compensation. As Samsung navigates these uncharted waters, it remains to be seen if the company can stem the tide of discontent and regain the trust of its workforce.
