A union representing tens of thousands of workers at Samsung Electronics in South Korea went on strike on Friday, marking the first strike in the smartphone and chip maker’s 55-year history.
The Nationwide Samsung Electronics Union (NSEU) said last week that its 28,000 members – just under a quarter of the company’s total workforce in the country – would strike on June 7, following failed negotiations over pay and bonus schemes.
The union has asked its members to take a day off on Friday, which falls between a public holiday on Thursday and the weekend.
Son Woomok, a union leader, told CNN that “many employees used their annual leave today” and that at one location “all employees had taken leave so replacement staff were brought in.” He did not provide other details.
He had earlier said that many NSEU members work for Samsung’s flagship semiconductor unit. That division is trying to regain its former status as a top semiconductor company, according to Reuters, which says Samsung has fallen behind rivals SK Hynix and Micron Technology in supplying chips used in artificial intelligence (AI) processors.
A Samsung spokesperson told CNN that “there is no impact on manufacturing and management operations” as a result of the one-day strike.
“Today’s annual leave usage is lower than annual leave usage during Memorial Day last year,” the spokesperson added.
The world’s largest memory chip maker has had a few difficult years. A historic shortage of computer chips during the Covid pandemic was followed by declining demand last year as consumer interest in electronics remained weak due to global economic uncertainty.
But things are looking good for the company because of the AI boom.
It is optimistic about a revival in demand for mobile devices this year, especially with the rollout of new products such as AI-powered smartphones.
Last month, Samsung reported a more than tenfold increase in first-quarter operating profit amid forecasts of strong demand for AI and high-end chips, an area in which it competes with Intel (INTC) and Taiwan’s TSMC.
The vast majority of the world’s advanced microchips are made in just two places: Taiwan and South Korea. Taiwan’s industry is larger and more dominant, something South Korea is keen to challenge.
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