Samsung strikes trouble as unions threaten walkouts, regulator swoops

Oh great – another potential kink in the silicon supply chain

Samsung Electronics has struck trouble at home, potentially threatening the supply of semiconductors and smartphones.

One source of strife is the Korean giant's own workers, which last week voted to consider strike action after mediation efforts in a long-running pay dispute failed.

Samsung Electronics employs over 100,000 people in South Korea, and until 2018 had an informal but always-observed policy of not allowing them to unionize. That changed after management recognized the firm was out of step with contemporary Korean industrial relations practices, and after international campaigns by labor organizations.

Staff are now represented by at least five unions, which have sought better pay and conditions. Samsung has offered a 5.1 percent pay rise, while the unions want a 6.5 percent bump.

After long talks with Samsung failed, votes were held last week to consider strikes.

Workers decided they are willing to walk out. Unions whose members are dominated by workers at semiconductor and smartphone facilities led the charge.

For now, Samsung's staff are focusing on protests. The National Samsung Electronics Union, for example, has called for 1,000 workers to let their anger be known at a Samsung Office building.

Samsung has declared it is open to ongoing negotiations. But the prospect of strikes remains very real – just as the semiconductor and smartphone markets return to growth and potentially deliver enormous profits, thanks to demand for fast memory to power AI applications and improving consumer confidence.

If a strike goes ahead, it will be the first in the 54-year history of Samsung Electronics.

Samsung's other problem also erupted yesterday, as South Korea's Fair Trade Agency – the nation's antitrust watchdog – sanctioned Samsung for requiring local retailers to enter the price at which it sold the chaebol's products into an application.

That requirement meant Samsung knew how much profit its retailers made on its products and was able to negotiate wholesale prices accordingly – to its own advantage.

The electronics and home appliance giant required disclosure of that info from 2017 to 2023, but quit once the Fair Trade Agency opened an investigation.

The Agency yesterday ordered Samsung to stop collecting sale price info – forever – and to stop attempting to understand retailers' affairs. Continuous monitoring is now in place – if Samsung doesn't do the right thing, trouble awaits. ®

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