Samsung Electronics workers began a three-day strike for better pay on Monday, with their union pointing to further action should South Korea’s biggest conglomerate continue to fall short of its demands.

The National Samsung Electronics Union (NSEU), whose roughly 30,000 members make up almost a quarter of the firm’s South Korean workforce, also wants an extra day of annual leave for unionised workers and changes to the employee bonus system.

Low participation and automated production means the strike is unlikely to have a significant impact on output at the world’s biggest memory chipmaker, analysts said. Still, it signals a decline in staff morale at a pivotal point in the chip industry as tech firms embrace artificial intelligence.

The union's first industrial action last month involved coordinating annual leave to stage a mass walkout, which Samsung said had no impact on business activity. The firm said on Monday there was no disruption in production.

The union, which did not disclose last month’s strike participation levels, said 6,540 workers will be striking this week, mostly at manufacturing sites and in product development. It said the strike includes workers who monitor automated production lines and equipment so operations could be affected.

Union officials said about 3,000 strikers attended a rally in the rain near Samsung’s headquarters in Hwaseong, south of Seoul.

Union president Son Woo-mok disputed media reports of low participation, telling Reuters that the five-year-old union did not have enough time to educate members about the issues.

“Education about labour unions … has not been enough. But I don’t think this participation is low because our union is still young compared to other unions,” he said.

Lee Hyun-kuk, the union’s vice president, said there could be further strikes if Samsung does not improve its proposals.

Samsung’s proposals include flexibility in pay and annual leave conditions but do not meet union demands of increased pay and leave, Lee told Reuters.

Union officials also want equality in the bonus system. They said bonuses for rank-and-file workers are calculated by deducting the cost of capital from operating profit, whereas those for executives are based on personal performance goals.

“I was telling people that I was proud to work at Samsung, but the truth is I am not,” said Park Jun-ha, 20, an engineer at Samsung’s chip packaging lines who joined the firm in January, adding that he was not satisfied with its “opaque” bonus scheme.

The union’s membership has grown since Samsung pledged in 2020 to stop discouraging organised labour. Its growing voice is demanding attention just as Samsung struggles to navigate competition in chips used for artificial intelligence (AI) applications, analysts said.

Samsung’s share price performance has lagged compatriot chip rival SK Hynix (000660.KS), opens new tab, with union officials blaming Samsung’s AI woe on slow development in high bandwidth memory (HBM) chips that are in high demand for use in AI processors.

Even so, Samsung estimated a more than 15-fold rise in second-quarter operating profit on Friday, as rebounding chip prices driven by the AI boom lifted earnings from the year prior’s low comparison base.

Its share price was up 0.2% in afternoon trade on Monday after rising as much as 1.72% earlier in the session to its highest since January 2021. Last week, it jumped 6.9% on preliminary quarterly earnings that exceeded analyst estimates. (Reuters)

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