With Samsung Electronics' (005930.KS) labor union signaling a strike next month, academics warn that the fallout could extend beyond direct financial losses to irreversible damage to global supply chain trust.
Billions Lost Per Minute, Operating Profit Could Drop 10 Trillion Won if Prolonged
According to industry sources on Wednesday, Professor Song Heon-jae of the University of Seoul's Department of Economics recently presented on "The Ripple Effects of Samsung Electronics Union Strike" at an Anmin Policy Forum seminar. The Anmin Policy Forum is a private policy research forum chaired by former Deputy Prime Minister and Minister of Economy and Finance Yoo Il-ho.
Song estimated that if the strike materializes, losses from factory shutdowns would reach several billion won per minute and about 1 trillion won ($700 million) per day. If prolonged, operating profit in the semiconductor division alone could decline by up to 10 trillion won ($7 billion).
However, Song viewed customer defection and supply chain restructuring pressure as more serious than direct losses.
"Global big tech customers may begin reviewing alternative supply lines such as TSMC to diversify risk," Song said. "Given the nature of the semiconductor industry, where process verification requires enormous cost and time, customers who leave once are difficult to win back."
In practice, AMD incorporates supply chain resilience into its ESG evaluation criteria, while Nvidia directly applies quarterly and semi-annual supplier assessment results to volume allocation.
Song divided strike costs into "visible costs" (production halts and revenue decline) and "invisible costs" (weakened trust, delayed investment, and ecosystem shocks), emphasizing that the latter is more fatal.
"In semiconductor technology, falling behind by even one or two years means losing competitiveness," he said. "While Nvidia, TSMC, and Intel are waging an all-out battle for AI chip supremacy, expending resources on resolving internal conflicts itself represents an enormous opportunity cost."
Chain Reaction Could Hit 1,764 Parts Suppliers; Taiwan Eyes Windfall
The impact of the strike is not expected to stop at Samsung Electronics. The company has 1,764 suppliers in materials, parts, and equipment, and the Pyeongtaek Campus reportedly creates about 30,000 jobs per production line, including suppliers. A shutdown could deal a direct blow to large-scale employment and local economies.
Taiwanese media recently reported that if Samsung Electronics' production disruptions materialize, Taiwanese semiconductor companies would reap windfall gains and gain leverage in price negotiations.
Song pointed to opacity in performance bonus calculation criteria and information asymmetry as the background of this conflict. He interpreted the current situation through the "Hicks Paradox," in which both labor and management know a strike harms both sides, yet fall into an inefficient equilibrium by hiding or exaggerating information.
As solutions, he proposed six tasks: disclosing performance compensation criteria; restructuring the compensation system based on objective indicators such as ROIC (return on invested capital), TSR (total shareholder return), and EVA (economic value added); differentiated distribution by profit bracket; introducing cap, floor, and clawback mechanisms; establishing external verification and arbitration mechanisms; and institutionalizing pre-strike mediation procedures (cooling-off).
Samsung Electronics faces the second strike crisis since its founding amid an increasingly assertive union.
