Samsung Stuck By Its First Ever Union Strike; May Add To Global Chip Shortage

The first ever strike at the South Korean tech giant Samsung Electronics was called by the union representing thousands of employees there. This is the first ever strike seen by smartphone giant Samsung, which is owned by the Samsung Group. The largest family-run conglomerate in the nation is in charge of Asia's fourth-largest economy.

The biggest manufacturer of memory chips, smartphones, and televisions worldwide is Samsung Electronics. Experts have cautioned that a full-scale strike might have an impact on the company's production of computer chips as well as the worldwide supply chains for electronics.

Reasons Behind Strike

The persecution of labor unions is intolerable to us now. In response to the company's disregard for its workers, we are announcing a strike," a union representative stated at a news conference that was broadcast live.

Since the beginning of the year, Samsung Electronics' management and the union have been in wage negotiations, but they have not been able to come to an agreement. The union has asked for a bonus based on the company's profits as well as a 6.5 per cent pay increase.

It was well known that Samsung Group did not permit unions to represent its employees until 2020, when the business came under heavy public scrutiny following the prosecution of its chairman for bribery and market manipulation.

Impact On Global Supply Chain

According to data released by the trade ministry, semiconductors are South Korea's top export, reaching USD 11.7 billion in March, their highest level in nearly two years, and making up a fifth of the country's total exports.

Although South Korean chipmakers, led by Samsung, saw record profits in recent years due to skyrocketing product prices, memory chip sales were negatively impacted by the global economic downturn.