Samsung Faces Chip Production Disruption as Over 6,500 Workers Strike for Higher Wages and Bonus Adjustments

July 08, 2024 – Over 6,500 workers at Samsung Electronics have walked off their jobs today, demanding higher wages and adjustments to the performance-based bonus system. The strike, led by the Korean labor union, is intended to convey these demands to Samsung management through a three-day protest.

Negotiations between the two parties regarding salary and vacation time broke down last month, prompting the largest labor union at Samsung to plan the strike after weeks of preparation. This marks an escalation from a one-day strike in early June and is the first such action in Samsung’s 55-year history.

Previous reports have highlighted two main points of contention:

Insufficient Salary Increase: The National Samsung Electronics Labor Union in Korea believes that a 5.1% salary increase is too low and is demanding a raise to 6.5%.

Performance Bonus System: The union is calling for Samsung Electronics to adjust its performance bonus calculation method, shifting from being based on Economic Value Added (EVA) to Operating Profit, in line with SK Hynix and LG Electronics.

Union leader Sun Yumu stated, “Our goal with this strike is to disrupt production.” The union indicated that most of the workers participating in the strike on Monday are chip assembly line workers.

According to Bloomberg, Samsung is at a critical juncture and cannot afford internal unrest or production disruptions. In May of this year, Samsung unexpectedly replaced the head of its semiconductor division and is currently focused on persuading NVIDIA to use its high-end AI memory chips. Additionally, Samsung holds approximately 20% of the global DRAM market share and about 40% of the NAND flash memory market share, making any operational interruption potentially disruptive to the global supply chain.

Samsung representatives have declined to comment on the matter.

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