Global chip shortage likely as Samsung workers plan to strike ‘indefinitely’

Much of Samsung’s production is automated, but the company is likely to witness manufacturing snarls in the coming weeks.

Samsung Electronics Co.’s labor union of 28,000-plus workers has declared an indefinite strike escalating a dispute with South Korea's biggest company. The move threatens production at the world’s largest maker of memory chips and comes after thousands of workers rallied outside Samsung’s chipmaking complexes south of Seoul marking a three-day walkout demanding better pay. This is the largest organized labor action in the South Korean conglomerate’s half-century history.

Members of the National Samsung Electronics Union shout slogans during a rally as they began a three-day general strike outside of Samsung Electronics' Hwaseong campus in Hwaseong, South Korea. (AP)

The union said in a statement, “Management has no intention of dialogue. We have clearly identified line production disruptions and the company will regret this decision,” it said. “Management will eventually relent and come to the negotiating table.”

Much of Samsung’s production is automated, but the company is likely to witness manufacturing snarls in the coming weeks while it is trying to convince Nvidia to use its high-bandwidth memory.

The union's negotiations over pay and vacation time collapsed last month in the biggest escalation from a single-day strike in early June- the first in Samsung’s 55 years of existence.

Union leaders have said that through the strike they intend to fulfill their demands by disrupting production at one of the company’s most advanced chip facilities. This comes ahead of Samsung’s biggest product launch of the year in Paris, where it’s expected to unveil new foldable phones and watches with AI and novel health tracking features.