Samsung tech strike threatens global AI memory chip supply

Samsung Electronics and its primary South Korean labor union have made some concessions in last-minute negotiations, according to the National Labor Relations Commission. The breakthrough comes amid immense pressure from government officials and business groups desperate to avert a massive 18-day strike scheduled to begin this Thursday.

Nearly 48,000 workers are prepared to walk off the job over a dispute regarding bonus structures. A strike of this scale could severely impact both the local and global technology sectors. Samsung accounts for nearly a quarter of South Korea's total exports, and a prolonged shutdown could shave an estimated 0.5 percentage points off the country's annual economic growth. Furthermore, as the world's largest memory chip maker, Samsung's production halt could disrupt global DRAM memory supplies by up to 4%, worsening existing shortages driven by the artificial intelligence boom, News.Az reports, citing Reuters.

While government mediators confirmed that the two sides have narrowed their differences, they remain deadlocked on two key issues regarding annual bonus caps and profit-sharing allocations. Employee frustration has peaked following a widening pay gap with smaller rival SK Hynix, which has capitalized heavily on supplying high-bandwidth memory chips to Nvidia and offered its workers significantly higher bonuses.

To mitigate the fallout, a South Korean court ruled that essential staffing levels must be maintained at critical production facilities even if the strike proceeds. Meanwhile, the South Korean government has threatened to step in with emergency arbitration, which would legally suspend the walkout for 30 days to force continued mediation.

News.Az 

By Aysel Mammadzada