Samsung Electronics (005930) and its union returned to the bargaining table at the eleventh hour before a full-scale strike, but industry concerns are mounting rather than subsiding. Despite nearly 12 hours of marathon talks, the two sides failed to narrow differences over the union's aggressive bonus demands. Samsung's global Big Tech customers, led by Apple, have expressed concerns one after another, even hinting at the possibility of pulling out of the supply chain.
According to industry sources on the 11th, working-level officials at Samsung's Big Tech customers, including Apple and HP, have recently made successive inquiries to the company about the labor dispute, the likelihood of a strike, and contingency plans. Apple and HP use Samsung DRAM in their iPhones and PCs, so a production halt from a strike would directly disrupt their product launches, making their concerns particularly acute. PC makers such as HP, grappling with a recent memory shortage, have begun installing or considering Chinese DRAM from ChangXin Memory Technologies (CXMT).
As Big Tech's concerns grow, much of corporate America is watching closely for signs of a Samsung strike. The American Chamber of Commerce in Korea (AMCHAM), the country's largest foreign business association with some 800 member companies including Big Tech firms, said on the same day, "If production disruptions occur at Samsung Electronics, concerns over supply bottlenecks, heightened price volatility, procurement reliability, and overall supply chain stability could intensify," adding, "There is the possibility that global companies will accelerate supply chain diversification and that rival countries will reap the benefits." The statement amounts to an official warning that, should U.S. companies be hit by a Samsung strike, they may shift suppliers to Chinese or Taiwanese memory and foundry firms such as CXMT and TSMC.
Customer concerns are deepening because labor-management tensions are worsening even as the strike date of the 21st nears. Mediated by the National Labor Relations Commission (NLRC), Samsung's labor and management began a two-day post-dispute mediation at the Sejong Government Complex on the 11th, but the first day ended without meaningful progress in bridging positions. The NLRC plans to reconvene on the 12th and prepare a mediation proposal, but it remains uncertain whether both sides will accept it.
The union's stance is especially firm. Choi Seung-ho, chairman of the Samsung Electronics branch of the Supra-Enterprise Union, which holds representative bargaining rights, said as he entered the mediation venue, "We are continuing to call for bonuses equivalent to 15% of operating profit, the abolition of the cap, and institutionalization of the system. If the company has no position on this, mediation will not be reached even today."
In earlier wage negotiations, management proposed setting aside more than 10% of operating profit as the bonus pool for the Device Solutions (DS) division this year, along with a 6.2% wage hike and welfare benefits including low-interest home loans of up to 500 million won. But the union contends this is not enough.
Tensions rose further on the 8th when police conducted a search and seizure over allegations that the union had drawn up a so-called "union blacklist" by improperly accessing employee personal information to identify union members. Police reportedly obtained four IP addresses with abnormal access records during the search and have identified the users.
Global investment bank JPMorgan analyzed that if the strike materializes, Samsung Electronics' operating profit this year could fall by 40 trillion won, with knock-on damage to its suppliers. Amid such concerns, government officials have also moved to placate the union. Minister of Employment and Labor Kim Young-hoon said of the mediation, "Just as Samsung Electronics' labor and management built a world-class company through technology, they must also set a new model for labor-management relations," adding, "I hope both sides will approach mediation with a sense of social responsibility, befitting the name 'Samsung, another family.'"
Deputy Prime Minister and Finance Minister Koo Yun-cheol added, "At this critical time when the entire world is coming to Korea desperate to secure semiconductor chips, it would be regrettable to miss this opportunity ourselves due to labor-management discord."
