Samsung Electronics is making a last-minute effort to prevent a large-scale strike among employees in its chip division. Unions and management resumed talks on Monday after earlier negotiations over salaries and bonuses had stalled.
The threat of a prolonged work stoppage is causing nervousness in South Korea and within the international technology sector, Reuters reports.
The unions are threatening to walk off the job for 18 days starting Thursday. More than 45,000 employees could be involved. That would make it potentially the largest strike in the history of Samsung Electronics.
Chip shortages heighten tension
The situation comes at a time when demand for memory chips is exceptionally high. In particular, the growth of AI data centers and AI systems has led to high demand for memory components for servers, laptops, and smartphones. Samsung, along with competitors such as SK hynix, is among the leading suppliers of these chips.
According to South Korean media, both the government and Samsung’s customers are warning of potential disruptions in the global supply chain. Moreover, Samsung plays a key role in the South Korean economy. The company accounts for about a quarter of the country’s total exports.
Shortly before the new round of negotiations, Samsung received support from the courts. A South Korean court ruled that any strike must not completely disrupt production. The unions must ensure that safety procedures and quality controls continue to function. Furthermore, production equipment or materials must not be damaged.
If unions fail to comply with these conditions, they risk fines equivalent to approximately 67,000 euros per day. Union leaders may also be held individually financially liable. The ruling was well-received by investors. Samsung Electronics shares rose sharply on the Seoul stock exchange on Monday.
Government Fears Economic Damage
The South Korean government is closely monitoring the situation. President Lee Jae Myung emphasized on Monday that both workers’ rights and the position of companies must be protected. According to him, workers deserve fair compensation, but shareholders and investors must also be taken into account.
Prime Minister Kim Min-seok previously stated that the government could resort to mandatory arbitration if necessary to prevent a strike. This would allow work stoppages to be temporarily banned while negotiations continue. The unions are showing little willingness to compromise for now. They argue that pressure from the government or the courts is no reason to refrain from taking action if Samsung does not put a better wage proposal on the table.
According to local reports, executives within Samsung’s chip division have issued internal warnings about the consequences of a prolonged strike. Major customers, including NVIDIA, are reportedly concerned about potential quality issues or delivery delays if production processes come under pressure.