June 03, 2024 – Samsung Electronics is currently embroiled in a negotiation stalemate with the National Samsung Electronics Union (NSEU), representing over 28,000 workers, who have scheduled a one-day strike for June 7th. While this may seem minor compared to strikes that last weeks or months at other companies, the impact on chip production could be significant.
The reason lies in the intricate nature of semiconductor factories, which require immense amounts of time to start up. A mere 28-minute power outage at a Samsung plant in South Korea in March 2018 resulted in a 3.5% global drop in flash memory production, costing the company over 36million.In2019,anotherSamsungfactoryexperiencedaone−minutepoweroutage,yetittookthreedaystorestoreproduction.In2021,agridfailureshutdownSamsung′sAustin,Texas,plantforamonth,resultinginlossesofnearly290 million and exacerbating the global chip shortage due to difficulties in restarting production.
These incidents highlight the fragility of semiconductor manufacturing, leading some media outlets to question whether the impending strike will affect global chip supplies. However, according to KoreaTimes, market research firm TrendForce stated that “the strike is unlikely to impact DRAM and NAND Flash production or cause any shipment shortages.” Furthermore, spot prices for DRAM and NAND Flash had been declining prior to the strike announcement and have remained unchanged since.
NSEU announced the strike nine days before the scheduled date, on May 29th, 2024. With spot prices unchanged, the general consensus is that this one-day strike will not substantially alter the global chip supply landscape. Nevertheless, given Samsung’s significant losses from previous disruptions, the strike is bound to inflict a hefty cost on the company.
