'Chip Shortage' About to Sweep the Globe? Samsung Faces Largest Strike in History.

TradingKey - On March 17, Reuters reported that the National Samsung Electronics Union (NSEU) launched a 10-day strike ballot last week. Approximately 90,000 union members are eligible to participate, representing the vast majority of Samsung's 125,000 employees in South Korea. The results of the vote will be released this Wednesday.

Choi Seung-ho, chairman of the Samsung Electronics Labor Union (SELU), stated last week that union members are voting on plans for a strike in May. He noted that if workers fail to reach an agreement, they plan to initiate an 18-day strike starting May 2, which could impact approximately half of the production at Samsung's semiconductor plant in Pyeongtaek, south of Seoul.

The vote also marks the final breakdown of eight-month-long wage negotiations between the union and Samsung Group, paving the way for what could be the largest strike in Samsung's history.

According to South Korean chip industry sources, a shutdown of Samsung's production lines could mean that restarting them would take up to two months, with potential losses reaching tens of billions of dollars.

A Samsung Group executive stated that even a single production disruption caused by a strike could damage trust with customers and take years to recover, as the issue is extremely sensitive.

Samsung's lack of experience in labor relations management may amplify the potential impact of this conflict; Samsung workers launched their first-ever strike in 2024.

Furthermore, internal brain drain at Samsung is extremely severe. Analysts warn that external competition for talent is also intensifying the pressure of attrition. Choi Seung-ho mentioned that Tesla is attracting Samsung chip designers with lucrative compensation packages. In February, Tesla CEO Elon Musk publicly called for South Korean chip industry workers to apply to join Tesla, as the company aggressively develops its AI chip business for autonomous vehicles and humanoid robots.

As one of the world's largest memory chip suppliers, any large-scale production disruption at Samsung could create an additional shock to a semiconductor supply system already tightened by surging demand from AI data centers. More critically, such a shock could propagate through the supply chain, amplifying global chip price volatility and exacerbating uncertainty across the industry.

Conversely, a tightening of chip supply could grant chipmakers greater pricing power. This would strengthen the product pricing capabilities of manufacturers such as Micron, SanDisk, and SK Hynix. From this perspective, it may serve as a positive catalyst for the semiconductor sector.