TLDR
- Samsung’s foundry chip output dropped 58% and memory chip output fell 18% during an overnight shift as workers protested over pay
- The union is demanding performance bonuses equal to 15% of operating profit and removal of the bonus ceiling
- A general strike is threatened from May 21 to June 7 if no deal is reached
- An 18-day strike could cause global DRAM supply disruptions of 3-4% and NAND disruptions of 2-3%
- Samsung stock closed down 2.23% at 219,500 won; KOSPI ended nearly flat
Samsung Electronics’ labor union is turning up the heat on management, and the chip market is paying attention.
Around 40,000 union members rallied near Samsung’s Pyeongtaek campus on April 23, skipping the overnight shift from 10 p.m. Thursday to 6 a.m. Friday. That alone was enough to cause foundry chip production to drop 58% and memory chip output to fall 18% in a single shift.
Samsung declined to comment.
The union — which recently secured majority union status for the first time — is demanding that 15% of operating profit be paid out as performance bonuses. They also want the existing bonus ceiling system scrapped entirely.
If no agreement is reached with management, the union has threatened a full general strike running from May 21 to June 7.
What a Strike Could Mean for Supply
Analysts are watching closely. KB Investment & Securities research head Kim Dong-won said in a report that the strike “will serve as a key variable that deepens supply shortages” given already tight memory market conditions.
Samsung holds a 36% global market share in DRAM and 32% in NAND flash. A prolonged strike at its Pyeongtaek and Hwaseong facilities could reduce global DRAM supply by 3-4% and NAND supply by 2-3%, according to Kim’s analysis.
Even after a strike ends, Kim estimates it could take an additional two to three weeks to restart and normalize automated production lines.
Participation levels matter too. The July 2024 strike saw only about 15% of union members walk out, limiting market disruption. This time, analysts expect 30,000 to 40,000 members — roughly 30-40% of total union membership — to participate if a strike goes ahead.
Shareholder Pushback
Not everyone is on the union’s side. Meeting the wage demands would require approximately 45 trillion won ($32 billion) in bonus payments, raising concerns that it could squeeze investment in facilities and R&D.
Members of the Korea Shareholders’ Movement Headquarters held a counter-rally near the union’s assembly site, arguing the demands could directly damage shareholder value during a semiconductor boom cycle.
The broader analyst view, however, is that earnings forecasts are unlikely to change even if a strike does happen. One unnamed analyst at a major securities firm said the bigger risk is investor sentiment and short-term supply and demand, not long-term profit.
“Unless the strike is prolonged or involves radical actions such as damage to production facilities, it has not had a fatal impact,” the analyst said.
Samsung stock closed at 219,500 won on April 24, down 2.23% on the day. The KOSPI ended at 6,475.63, down just 0.18 points.
🚨 Our April Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for April, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
