Samsung Union Strike and Chip Supply
TapTechNews June 3rd, Samsung Electronics is currently in a negotiation deadlock with the National Samsung Electronics Union (NSEU), which represents over 28,000 Samsung workers and plans to stage a one-day strike on June 7th. While this may seem insignificant compared to strikes at other companies that last for weeks or months, chip production is a completely different matter.
This is because semiconductor factories require a significant amount of time to start up. For example, in March 2018, a power outage at Samsung's South Korean factory for just 28 minutes led to a 3.5% reduction in global flash memory production, and Samsung lost more than 36 million US dollars (TapTechNews note: currently about 261 million Chinese yuan). In 2019, a power outage at another Samsung factory lasted for one minute, but it took three days to resume production. In 2021, due to a power grid failure that led to a one-month shutdown of the Austin factory in Texas, Samsung also lost nearly 290 million US dollars (currently about 2.105 billion Chinese yuan). At that time, due to the difficulty in restarting production, it exacerbated the chip shortage problem.
These events demonstrate the fragility of semiconductor production, and some media organizations are also questioning whether this strike will affect the global chip supply. However, the Korea Times reported that TrendForce, a semiconductor industry market research company, said, This strike will not affect DRAM and NAND Flash production, nor will it cause any shortage in shipments. In addition, the spot price of DRAM and NAND Flash has been declining before the announcement of the strike, and there has been no change since the announcement.
The NSEU announced the strike 9 days before the planned date, that is, May 29, 2024. Due to the fact that the spot price has not risen, the general consensus is that this one-day strike will not substantially affect the global chip supply situation. However, referring to the huge losses suffered by Samsung due to previous interruptions, this strike is sure to bring significant losses to Samsung.