
Workers at Samsung, the dominant conglomerate in the South Korean economy, went on strike for the first time on Friday. This strike coincides with Samsung Electronics’ efforts to regain its competitive edge in the memory chip business, a crucial component in advanced artificial intelligence systems that are shaping global technology rivalries. The majority of the striking workers are from Samsung’s chip division, and the strike was organized after negotiations regarding wage increases and bonuses broke down.

According to Lee Hyun Kuk, the vice president of the Nationwide Samsung Electronics Union, the company doesn’t consider the union a valuable negotiating partner. The union claims to represent 28,000 members, approximately one-fifth of Samsung’s global workforce, and nearly 75% of them voted in favor of the strike in April.
Samsung Electronics representatives stated that the company is attempting to reach an agreement with the union but did not provide further comments on the strike. It is important to note that the strike is not expected to impact Samsung’s manufacturing output significantly. It was strategically planned to occur between a national holiday and the weekend when many South Koreans have planned vacations. The exact number of workers participating in the strike is still unclear.
Although the strike may not significantly affect production, it is an inconvenient time for Samsung. The company has been working to reassure clients and investors that its chip business can meet the demands of the growing artificial intelligence market. Samsung has been the world’s largest memory chip manufacturer for years and reported approximately $1.4 billion in profit from its chip division in the first quarter of this year. However, the company experienced four consecutive quarters of losses and ended last year with its weakest earnings in over a decade.
To compound matters, Samsung’s local competitor, SK Hynix, claimed the top spot in the market for the next-generation high-bandwidth memory chips. This occurred just as demand for these chips skyrocketed, with companies like Nvidia rushing to purchase them for their artificial intelligence systems. Analysts suggest that SK Hynix was quicker in anticipating this demand compared to Samsung.