Samsung workers in South Korea launch indefinite strike for better pay

By:
on Jul 10, 2024
Listen
  • Approximately 30,000 workers are affiliated with the National Samsung Electronics Union.
  • Approximately 6,500 workers have joined the strike, with protests drawing 3,000 attendees.
  • Despite the strike, Samsung forecasts a 15-fold profit increase due to AI technology boom.

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

The union representing Samsung Electronics workers in South Korea has initiated an indefinite strike involving around 30,000 members, demanding better pay and benefits.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

The National Samsung Electronics Union (NSEU) announced the strike at the end of a three-day general strike, citing management’s unresponsiveness. 

The NSEU claims its actions have disrupted production, while Samsung Electronics disputes this, asserting its commitment to maintaining production lines and engaging in good faith negotiations.

The union declared, “The company has no intention to engage in dialogue even after the first general strike, thus we declare a second general strike starting from July 10th, lasting indefinitely.” 

So far, about 6,500 workers have joined the strike, with the union urging more members to participate. A protest on Monday drew approximately 3,000 people.

Samsung shares remain flat as strike continues

Copy link to section

Samsung Electronics, the world’s largest maker of memory chips, smartphones, and televisions, saw its shares trading flat to slightly lower on the Korea Stock Exchange following the strike announcement. 

The company, a key unit of South Korea’s largest conglomerate, the Samsung Group, has faced significant public scrutiny in recent years, especially after its chairman’s prosecution for market manipulation and bribery in 2020.

Earlier this year, union members and management held several rounds of talks regarding the union’s demands for higher wages and better working conditions.

However, they failed to reach an agreement. In June, some union members collectively used their annual leave for a one-day walkout, marking what observers noted as the first labor strike at Samsung Electronics.

Approximately 30,000 Samsung workers are affiliated with the National Samsung Electronics Union, the company’s largest union, while others belong to smaller unions.

In 2020, Samsung’s then-vice chairman, Lee Jae-yong, pledged to stop suppressing employee efforts to organize unions. This statement came as he expressed remorse over his involvement in a major 2016 corruption scandal that led to the ousting of the country’s president.

Samsung’s union-busting practices had been criticized by activists for decades, although labor actions in other businesses and sectors are common in South Korea.

Meanwhile, thousands of South Korean medical interns and residents have been on strike since February, protesting a government plan to significantly increase medical school admissions.

AI boom boosts Samsung’s forecast despite labor unrest

Copy link to section

Despite the labor unrest, Samsung Electronics recently reported positive financial projections, expecting its profits for the three months ending June 2024 to increase 15-fold compared to the same period last year.

This optimistic forecast is largely due to a boom in artificial intelligence (AI) technology, driving up prices of advanced chips.

The ongoing strike and its potential impact on production and financial performance remain concerns for investors and stakeholders. 

However, Samsung’s significant role in the global technology market, particularly in AI and advanced chip production, suggests that the company will continue to be a key player despite current challenges.

samsung Stock Market Tech