"This is a nation-destroying strike targeting the Achilles' heel of the semiconductor industry."
On the road leading up to the Leeum Museum of Art in Hannam-dong, Yongsan-gu, Seoul, angry voices of Samsung Electronics (005930.KS) shareholders were shaking the upscale residential neighborhood. As the union pulled out its general strike card amid an intensifying global battle for semiconductor supremacy, shareholder groups that had run out of patience have been taking to the streets of Hannam-dong one after another, hanging additional banners to push back.
According to reporting compiled by Seoul Economic Daily on Oct. 6, the "Samsung Electronics Shareholder Action Headquarters" recently installed a row of banners strongly condemning the union strike along the road to the Leeum Museum. The new shareholder group's criticism follows a warning the previous day from the "Korea Shareholder Movement Headquarters," which said it would seek damages from every union member who participates in the illegal strike. The new group began as a friendship gathering among Samsung Electronics shareholders and was reborn as a formal shareholder organization after holding its launch ceremony last month.
The banners hung by the Shareholder Action Headquarters carried the stinging rebuke that "the Samsung union's strike will only hand windfall gains of explosive growth to semiconductor companies in other countries." Other messages included "Public opinion has turned its back," "A strike in essential semiconductor processes is more serious than a strike by the military or police," and "Ban nation-destroying strikes that hold the national economy hostage through legislation."
The Shareholder Action Headquarters declared that if the majority union at Samsung Electronics pushes ahead with its general strike from the 21st of this month and holds a rally near Chairman Jay Y. Lee's residence in Hannam-dong on the first day, it will stage a counter-rally with as many as 100 or more shareholders. In an interview with this newspaper on Oct. 6, Cho A-mi, secretary-general of the Samsung Electronics Shareholder Action Headquarters, said, "Does the country have to collapse so each union member can receive more than 500 million won?" She added, "Once production lines stop, it's not just a simple disruption — recovery takes close to a month, and if small and medium-sized suppliers in the supply chain shift their clients to Taiwan's TSMC or to Japan and China, we are heading down the path of national ruin."
Market concerns are already showing up in the numbers. Citi Research recently lowered its target price for Samsung Electronics to 300,000 won from 320,000 won in a report. Citi maintained its "buy" recommendation based on solid memory market conditions, but the strike risk proved a drag. The report analyzed that provisions for performance-based bonuses stemming from the intensifying union strike will put downward pressure on earnings. It also cut its operating profit forecasts for 2026 and 2027 by 10% and 11%, respectively. By contrast, no such report has emerged on rival SK hynix (000660.KS). In terms of share price gains as well, SK hynix is outpacing Samsung Electronics.
As the situation spiraled, the board of directors also stepped in to contain the damage. Shin Je-yoon, chairman of the Samsung Electronics board, said on the company's internal bulletin board on Oct. 5 that "massive strike losses and customer defections will cause serious harm to shareholders and the local community." He made an unusual public appeal, warning that if "just-in-time supply" — the core of the semiconductor industry — is shaken, the damage could extend beyond tens of billions of dollars in lost exports to a fatal blow across the national economy, including a surge in the exchange rate.
Currently, the union is demanding that 15% of annual operating profit be paid out as performance bonuses and has given notice of an 18-day general strike starting on the 21st. Based on market estimates of operating profit, the amount would reach a staggering 45 trillion won ($33 billion). "While rival countries are racing ahead by pouring in astronomical subsidies, shackling ourselves with an internal strike is clearly an act of self-harm," an official from the business community said.
