Strikes are never good for business. Unhappy employees walking out, stopping the wheel of production in its tracks, and potentially causing serious business disruption is something that companies go to great lengths to avoid.
Samsung Electronics has been engaged in negotiations with its largest employee union for several months now, but the deadlock still persist. The union has now called for a strike, a historic event in its own right, as this would be the first time in the company's long history that its employees will go on strike.
Union strike may not cause significant business disruption for Samsung
The Samsung Electronics Union has more than 30,000 members and it counts for over a fifth of the company's entire workforce in South Korea. The union has been negotiating a pay increase and other privileges. Samsung has already agreed to a 5.1% wage increase, but the union remains firm on its demands, which include an extra day of leave and a more transparent evaluation process for performance bonuses. The union has now given a strike call for June 7, 2024.
There were concerns that the strike could potentially disrupt memory production. Since Samsung is the leading supplier of DRAM and NAND flash memory, significant business disruption could have far-reaching consequences for the entire memory market. However, market research firm TrendForce is of the view that this trike won't impact product or lead to any shortages in the supply chain.
It further highlighted that the strike is only for one day and it's within a flexible range for the production schedule. It's highly likely that Samsung already pre-emptively adjusted the production schedule and manpower allocation to account for the strike.
It's also partinent to note that Samsung's memory factories primarily rely on automated production that requires minimal manpower to operate so the risk of disruption, at least due to a one day strike, remains minimal.
