What you need to know

Workers have begun a three-day strike at the South Korean chipmaker over pay and other employee benefits.

A month after the first ever strike at the South Korean tech giant, Samsung Electronics workers have downed tools, going on another strike for the next three days.

The National Samsung Electronics Union (NSEU) has approximately 30,000 members, which make up a quarter of the tech company’s workforce. In June, many workers used annual leave to carry out a one-day strike “in the face of the company’s neglect of labourers,” according to a spokesperson for the NSEU at a news conference.

Today (8 July) marks the first day of three-day general strike, in which union members gathered at the Hwaseong Nano City. According to CNN’s Yoonjung Seo, the union claims more than 6,000 people have participated in the strike and almost 4,500 of them are from semiconductor production lines.

Why are workers striking?

The union is striking for better pay for its workers, as well as an additional day of annual leave and changes to the employee bonus system.

Last month, the first strike in the company’s 55-year history took place when talks between the company and the union broke down. NSEU president, Son Woo-mok, said the union had accepted the pay raise proposed by Samsung Electronics but was asking for one additional holiday and “a transparent system to measure the performance bonus based on the sales profit”.

“The company is not hearing us and they are not communicating from our last negotiation session,” he said at the time.

Speaking to Reuters, the union’s vice-president, Lee Hyun-kuk, said they want equality in the bonus system because currently, rank-and-file worker bonuses are calculated by deducting the cost of capital from operating profit, while executive bonuses are based on personal performance goals.

The demands for better pay and a more equal bonus system come just days after the company’s latest earnings guidance shows that it expects to make a 15-fold jump in profits. As the world’s largest memory chipmaker, its latest earnings mark a strong comeback after it was forced to cut its global chip production ahead of a profit plunge last year.

Earlier this year, the company was also awarded a $6.4bn grant under the US Chips Act to boost the country’s semiconductor supply chain

Will it affect production?

Reports differ on the level of impact the strike will have. While union members make up a quarter of the company’s workforce, low participation of only a few thousand, along with automated production lines could mean a low impact on the company’s output.

Samsung told Nikkei Asia that there was no impact on its “business”, however, NSEU leaders said production lines using eight-inch wafers had “problems” this morning as workers joined the strike.

Speaking at a rally at the company’s office, Lee said semiconductor lines are much more vulnerable to a strike than management expected. “We all know that it does not work if just one shift is absent.”

Lee added that there could be further strikes if Samsung does not improve its proposals.

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