(Bloomberg) — Samsung Electronics Co.’s biggest union said it will hold a three-day walkout starting July 8, adding to challenges for South Korea’s largest company as it seeks to recover from setbacks in its semiconductor business.
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The Samsung National Electronics Union, the largest of the tech giant’s several unions with about 28,400 workers, announced the decision late on Monday after the latest wage negotiations failed to produce progress. The two sides resumed negotiations on June 13 after some unionized workers took a single day off on June 7, the first strike in the company’s 55-year history.
Samsung Electronics has long avoided the kind of labor turmoil that has plagued many of Korea’s top companies, including violent episodes at its automakers. The current disputes at the tech powerhouse have not disrupted operations, but they signal an uncertain new time for its workplace culture.
Samsung shares remained largely unchanged in Tuesday’s trading in Seoul. While investors don’t appear concerned for now, analysts say a rare shutdown at Korea’s biggest company could trigger similar actions within its industry — or beyond. Depending on how many workers in the main semiconductor division join the strike, the action could harm production at the world’s main memory chip maker or set new standards for the sector.
“This strike could also trigger broader labor actions across South Korea. Other major companies could see increased union activity or even strikes, indicating a potential domino effect within the industry,” said Billy Leung, investment strategist at Global X ETFs in Sydney. “The outcome of Samsung’s labor negotiations could set a precedent for the technology industry, influencing market dynamics and investment strategies in the semiconductor sector.”
The union’s latest decision came after management failed to accept the union’s demand for additional paid leave and a higher salary increase for 855 workers who did not agree to a 3% annual increase in basic salary, said Lee Hyun-kuk, secretary -the union’s deputy general told Bloomberg News. Union leaders met for the first time with Jun Young Hyun, the new head of Samsung’s semiconductor division, on Monday afternoon.
It’s unclear how many workers would participate in the three-day walkout, but the union will encourage its members to join the effort, Lee said.
The company has historically set salary increases through a board made up of representatives from both sides, and in March that labor management board agreed to increase this year’s salaries by 5.1%, representing a base salary increase of 3% and a performance increase of 2.1%. But that deal was later canceled due to differences over paid vacation and bonus payments.
(Updates with sharing actions and analyst comments from fourth paragraph)
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