Samsung Electronics employees are on strike for the first time in history

On Friday, for the first time in the company’s history, Samsung Electronics employees went on strike. The move comes at a time when the Korean corporation faces increased competition from other chipmakers, especially amid rising demand for AI chips.

The National Samsung Electronics Union (NSEU), the largest of the company’s several unions, called for a one-day strike at a Samsung office building in Seoul after negotiations over pay bonuses and time off stalled. Novel York Times reports that most of the striking workers are from Samsung’s chip division. (Technically, Samsung Electronics is just a subsidiary consisting of its consumer technology, device, and semiconductor businesses; Samsung itself is a conglomerate that controls real estate, retail, insurance, food manufacturing, hotels, and more.)

It is unclear how many of the approximately 28,400 NSEU members took part in the strike. Even, many Sockets If reports that the strike is unlikely to impact chip production or cause shortages. Union leaders he said Bloomberg that further action is planned if management refuses to engage.

That said, the fact that this is happening at all is an awkward moment for Samsung, especially given the tensions surrounding the chipmaking part of its business.

Last year, the division posted a loss of 15 trillion won ($11 billion), leading to: lowest operating profit in 15 years. The current artificial intelligence boom has played a enormous role in the massive loss. Samsung has long been a global leader in high-bandwidth memory chips that are now in demand to deliver next-generation AI capabilities. However, last year’s decline was partly due to Samsung not being prepared for the increased demand, which allowed a local rival to do so SK Hynix will take first place.

South Korea is no stranger to labor movements, but this strike is nothing low of significant Because it’s Samsung. The company as a whole is responsible for this about 20 percent of South Korea’s GDP. If Samsung sneezes, the whole country will catch a cool. Moreover, Samsung has the so-called several decades of history illegally breaking up trade unions. In 2020, Lee Jae-yong — then heir apparent and now executive chairman of Samsung Electronics — issued an apology and promised to end the company’s policy of “management without unions.” The immediate test of this commitment will be how he handles conflict in the future.