Samsung is one of only a few companies in the world with the facilities and capabilities to produce the chips most gadgets use. As it stands, over 40,000 workers are on strike at the Samsung chip plant in Korea.
Reports from Korea state that there is a worker strike taking place at a Samsung chip plant located in Pyeongtaek, South Korea, involving about 40,000 workers, making it the largest rally in the company’s history.
The cause of it seems to be Samsung’s performance-based pay cap. Union workers aren’t happy with this system and have demanded that Samsung remove the cap. They are also calling on Samsung to allocate about 15% of its operating profit as performance bonuses.
Samsung’s operating profit is projected to reach KRW 300 trillion in 2026. The workers’ demand translates to the company allocating KRW 45 trillion as performance bonuses, which would be 15%. Samsung is against that idea, considering it’s a huge sum of money.
Samsung’s alternative solution
During its negotiations with the union, Samsung has offered compensation packages equal to or better than those its competition offers. The union wasn’t satisfied with that and still demanded that the company put an end to the performance bonus caps.
The union might actually have their way. It had previously negotiated with SK Hynix, Samsung’s rival in the chip market, to accept their demand. For Samsung to not look bad compared to the competition or worse, lose its workers, it might be left with no choice but to give in.
The union has warned that it will begin an 18-day general strike on May 21 if both sides do not reach an agreement. 18 days are more than enough to disrupt Samsung’s operations. The company will lose money and while it’s still battling internal problems, its competitors could use it as an opportunity to get ahead.
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