The Korea Semiconductor Industry Association (KSIA) has publicly expressed concern as labor-management conflict at Samsung Electronics (005930.KS) shows signs of becoming prolonged. The association warned that if the planned 18-day general strike at Samsung Electronics, scheduled to begin on the 21st of this month, materializes, it could trigger a chain shock across Korea's semiconductor supply chain.
In a statement released Wednesday, the Korea Semiconductor Industry Association said, "We are deeply concerned about the impact of the current labor-management conflict at Samsung Electronics on the competitiveness of a key national industry and the stability of the supply chain," adding that "labor and management must find a solution through amicable dialogue and compromise."
The association pointed out that potential production disruptions at Samsung Electronics, the country's largest semiconductor company, could spread throughout the materials, parts, and equipment industry. The statement reflects industry concerns that any instability in Samsung Electronics' production line operating rates could have a cascading effect on suppliers of wafers, gases, chemicals, and components.
"As we enter the artificial intelligence (AI) era, this is a critical time to strengthen the capabilities of the entire semiconductor ecosystem, including domestic partner companies, to secure advanced semiconductor technology," the association said. "At a time when we need to move faster than before, progress must not be delayed by the Samsung Electronics general strike." It added, "Considering the ripple effects on the national economy and the semiconductor industry ecosystem as a whole, our semiconductor industry hopes that negotiations between Samsung Electronics labor and management will be resolved smoothly."
The association's statement comes as Samsung Electronics labor and management failed to narrow their differences even during post-mediation proceedings at the National Labor Relations Commission. The union has clashed with management over demands including the institutionalization of an operating profit-based bonus system. Management is reported to have proposed an expanded special compensation plan while maintaining the existing Overall Performance Incentive (OPI) system.
In particular, the union has strongly raised the issue of bonus disparities between the memory and non-memory (System LSI and Foundry) business divisions. The union argues that "the company is trying to maintain a structure of 300% for the memory division and 100% for the foundry division," and is demanding the abolition of the 10% cap on operating profit.
As the labor-management conflict intensified, Samsung Electronics' executive management also issued a separate apology on the same day. The executives said, "We have caused great burden and concern to the public and the government over labor-management issues," adding, "We will regard the union as a community sharing a common destiny and engage in dialogue with an unconditionally open attitude."
