Members of the Nationwide Samsung Electronics Union hold up signs urging Samsung Electronics to negotiate with the union in front of the company’s office in Seoul, May 24. Yonhap

Samsung Electronics’ union plans to stage a one-day strike on June 7, calling for better treatment. Concerns are mounting that a prolonged labor dispute could potentially disrupt semiconductor production at the world’s leading memory chip company, according to industry experts, Sunday.

The Nationwide Samsung Electronics Union (NSEU), representing the chipmaker’s workers, announced on May 29 that more than 28,000 union members would concurrently take a day off on June 7, essentially staging a one-day strike. Their demands include fair wages for their labor and improvements in the company’s salary system to ensure transparency.

Experts have warned that if a strike were to disrupt Samsung’s semiconductor production process, the potential damage to the company would be immense, because even a brief interruption in semiconductor production could result in significant consequences.

“Semiconductor production facilities require substantial time and resources to resume operations if they experience any interruption, no matter how brief. The seamless continuity of operations is paramount in these plants, and a protracted strike 카지노사이트킹 could indeed bring the production process to a standstill, resulting in substantial disruptions and costs for the company,” Lee Jong-hwan, a professor of semiconductor engineering at Sangmyung University, said.

For instance, in 2019, Samsung incurred losses exceeding 50 billion won ($36 million) when a 28-minute power outage occurred at its Pyeongtaek plant. Similarly, during the winter of 2021, a power outage caused by a cold wave forced a nearly month-long suspension of production at its Austin, Texas plant, resulting in estimated financial damages of around 400 billion won.

Kim Dae-jong, a professor of business administration at Sejong University, predicted that the Samsung union would strike again if negotiations with the company do not proceed well, which could become a critical factor that degrades the chipmaker’s competitiveness.

“If labor negotiations don’t go well in the future, the union may resort to striking again. Samsung is currently grappling with various challenges, such as difficulties in the HBM AI memory chip market, indicating that it is navigating a complex business environment,” Kim said.

“Therefore, how well Samsung handles its negotiations with the union going forward could have a significant impact on its business. The company needs to actively engage in dialogue with the union and thoroughly prepare to manage union-related issues.”

The NSEU has been negotiating wages with the company several times since last year, and upon failing to narrow differences in opinions during negotiations held on May 28, the union declared a strike.

“What we want is not a one percent or two percent wage increase. We demand fair payment for the work done,” Son Woo-mok, chief of the NSEU, said during a press conference held in Seoul on May 29. “It’s not about asking for more bonuses. We’re asking for transparent payments through system improvements.”

The industry view is that the one-day strike scheduled for June 7 is unlikely to disrupt semiconductor production at the company.

“This strike will not impact DRAM and NAND Flash production, nor will it cause any shipment shortages,” TrendForce, a market researcher in the semiconductor industry, said. “Additionally, the spot prices for DRAM and NAND Flash had been declining prior to the strike announcement, and there has been no change in this downtrend since the announcement.”

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