Industry Minister Kim Jung-kwan warned that a strike by Samsung Electronics' (005930.KS) labor union would cause enormous damage to the semiconductor industry, adding that invoking emergency arbitration would be unavoidable.
Kim posted the statement on his social media account on Friday. "I cannot help but worry, as the union says it will launch a general strike starting on the 21st if labor and management fail to reach an agreement," Kim said. "I earnestly urge both sides to resume dialogue as soon as possible."
The minister reiterated the semiconductor industry's significant position within Korea's broader industrial landscape. "The semiconductor industry is virtually Korea's only core strategic asset," Kim said. "The semiconductor industry is a winner-take-all industry that competes on speed and scale, requiring process innovation every one to two years and large-scale investments of more than 60 trillion won to build a single factory in order to survive." He added, "Competing countries are expanding their footprint in the semiconductor market based on strong government support and bold investment. The moment we lose competitiveness, it won't be a matter of falling to second place—survival itself will become difficult, and we will fall into the abyss."
"If a strike occurs, irreversible economic damage is expected," Kim warned. "If the plants stop, production losses could reach up to 1 trillion won per day. If all wafers currently in operation are damaged, the damage is expected to reach 100 trillion won." He further wrote that if the trust Korea's economy has built up is damaged, foreign clients may demand the relocation of production facilities, compounding the losses.
Kim argued that given such ripple effects, the government should invoke its emergency arbitration powers. "Considering the gravity of the matter and the unimaginable ripple effects, a strike must be prevented under any circumstances," Kim said. "As industry minister, I believe emergency arbitration is unavoidable if a strike takes place." Under Korean law, if the Minister of Employment and Labor determines that a labor dispute is likely to significantly harm the national economy, the minister can invoke emergency arbitration. Once the government invokes emergency arbitration, the union must halt all industrial action for 30 days.
