Samsung Prepares Emergency Measures as Union Threatens 18-Day Strike

Samsung has entered emergency management mode ahead of a potential 18-day labor strike in its home country, South Korea. This is because the company could see major disruptions to its semiconductor production and quality issues at its chip factories. The strike could also impact the global supply of memory chips.

Samsung could face major semiconductor disruptions from the strike

Samsung’s labor union reportedly plans to start a general strike from May 21 to June 7. The decision comes after the union failed to reach an agreement with management. They are demanding changes to the company’s current bonus system, including removing bonus caps and increasing employees’ share of operating profits. Industry watchers expect about 43,000 workers to join the strike.

Now, Korean media reports that Samsung has moved to an emergency management system and is preparing countermeasures. The company appears to be trying to secure production and maintain quality control before the strike begins. This could allow the firm to reduce potential damage.

“To manage quality, there likely was a need to adjust production volumes before the strike,” said a semiconductor industry official. “If quality issues arise, the structure is such that various problems, including disruptions to the global supply chain, can occur, so they moved to respond early.”

Industry estimates indicate that the impact of the emergency measures alone could reach between 10 trillion won and 20 trillion won. The losses could become much larger if the strike disrupts semiconductor production greatly (by fully halting manufacturing lines). Samsung could see direct and indirect losses of up to 100 trillion won.

If the strike indeed lasts for 18 days, Samsung might need several additional weeks to fully restart semiconductor production. This is because automated chip manufacturing lines may take time to normalize. As a result, Chinese memory makers such as CXMT and YMTC could benefit from the situation. We’ll let you know how the plan for the general strike develops.