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Samsung Labor Strike Targets High-Powered AI Memory Chips
The recent 2024 Samsung labor strike has been brooding for some time. Samsung Electronics’ South Korean labor union is now threatening to disrupt high-power AI chip production as part of an ongoing labor strike. On July 10th, the National Samsung Electronics Union announced it would continue its strike indefinitely as workers demand better labor conditions. The strike was originally planned to last only three days, but Samsung never came to the bargaining table with the union.
Samsung’s Labor Union Targets High-Level Chips
Samsung labor union leaders are targeting strategically important chip-making facilities in their strike effort, such as the high-bandwidth memory (HBM) site in Pyeongtaek. That fab site is critical to Samsung’s production of advanced AI memory chips, producing chips at 5nm and smaller. According to Trendforce, Samsung has about 47% of the market share for DRAM and 32% of NAND Flash memory. Currently, Samsung does not have advanced production sites outside of South Korea, with the Taylor, Texas fab site still expected to open sometime later this year.
There are currently conflicting indications regarding the severity of the impact from the strike. Before the union decided to extend the strike, Samsung stated that production had not been disrupted. However, in an interview with Bloomberg on Thursday, union head Son Woo-mok claims that there have been production disruptions and ‘equipment going idle’ because of the strike.
Samsung Electronics manufacturing sites also serve multiple other major electronics manufacturers. A production slowdown could have ripple effects beyond just impacting Samsung products.
2024 Samsung Labor Strike Timeline
The battle between Samsung and the labor union has been escalating since the start of 2024. According to labor union vice president Lee Hyun Kuk, Samsung cut bonuses for workers last year, which reduced up to 30% of their salary. The union began negotiating with Samsung in January, arguing for better wages, bonuses, and more paid vacation.
In April, workers voted to authorize the first strike in the union’s history after failing to reach an agreement. That first strike took place on Friday, June 7th, but did not have a major impact on production since June 6th was a national holiday in South Korea, and workers already had planned to take off on the 7th. According to Lee, the first strike in June was intended to send a message and not to impact production lines.
After the first strike failed to push Samsung to an agreement, on July 8th, workers escalated the labor dispute by walking off the job in a second strike that included approximately 6,500 people. This time, the union’s goal was to disrupt production lines. The originally planned 3-day strike was indefinitely extended on Wednesday, July 10th, after the union and Samsung failed to reach an agreement. As of today, July 15th, no movement between Samsung and the labor union has been reported.
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