Samsung’s chip factories face a nasty bout of paralysis as union talks collapse and an 18-day strike looms.
Samsung’s unionised workers now appear determined to begin a general strike on 21 May after last-minute negotiations with management collapsed again. Reports from South Korea say the breakdown has set the stage for the planned stoppage, which could run until 7 June.
In a rare scrap of good news, the union said it would “not stop trying to reach a settlement even during the strike.”
Samsung’s union workers are demanding 15 per cent of the company’s annual operating profit in bonuses. That works out at about $30 billion, which is not exactly biscuit money, even for a company the size of Samsung.
If they do not get it, union members say they will down tools for 18 days.
Samsung’s semiconductor division is the likely ground zero for the strike, although those factories are highly mechanised.
However, the knock-on effects of the strike in a world desperately needing DRAM are pretty obvious. For the global memory and consumer electronics markets, that means more price pressure and another supply chain headache.
KB Securities said that if 30 to 40 per cent of Samsung’s union members joined the strike, global supply disruption could hit DRAM and NAND. The disruption could reach 3 to 4 per cent for DRAM and 2 to 3 per cent for NAND.
A South Korean court issued an injunction earlier this week, barring activity that could disrupt normal operations. The court imposed a daily fine of 100 million won, about €57,000, on Samsung’s unionised workers for non-compliance.
The South Korean government appears to have failed in its attempt to force a compromise. Officials had threatened to invoke the country’s Emergency Arbitration Authority, which can legally suspend strike action for up to 30 days.
