By Hyunjoo Jin
SEOUL, March 18 (Reuters) – Samsung Electronics’ unionised workers in South Korea voted on Wednesday to authorise a strike, deepening a labour dispute over bonuses and raising the risk of production disruptions at the world’s biggest memory chipmaker.
A total of 93% of its 66,019 workers who cast ballots approved the strike plan, the union said.
If the workers fail to agree a deal, they plan to strike for 18 days from May 21, the union has said.
The union said the overwhelming support is a “strong warning” that management should respond to union demands.
Samsung did not immediately respond to a request for comment.
A strike at the chipmaker could worsen bottlenecks in the global supply of semiconductors, amid robust demand for artificial intelligence data centre operations, which has squeezed supply to industries from cars and computers to smartphones.
Union members began casting ballots last week after wage negotiations that started late last year collapsed.
The unions represents nearly 90,000 workers, accounting for more than 70% of its total workforce of 125,000 in South Korea.
Growing frustration among Samsung employees over a pay gap with key rivals drove a surge in union membership in the weeks after chipmaker SK Hynix accepted its union’s demand for compensation reforms in September.
The Samsung union is calling on the company to follow in the path of SK Hynix and scrap its bonus cap and link its bonus pool to operating profit.
Samsung said lifting the cap would make it challenging for them to fund future investments and shareholder returns in a capital intensive, cyclical industry.
Samsung relies heavily on South Korea for its memory chip production, producing 100% of its DRAM chips and making two thirds of its NAND chips at home, according to data from researcher Counterpoint.
The union will face an uphill battle to reach an agreement because of the sticky issue of abolishing the bonus cap, which is currently at 50% of annual salary, said Sohn In-joon, an analyst at Heungkuk Securities.
Lifting the cap could widen a pay gap between chip businesses and other businesses such as phones and TVs, which are expected to post sluggish earnings due to competition and surging chip prices, Sohn said.
(Reporting by Hyunjoo JinEditing by Ed Davies)
Comments