"Pay Us for Expected Strike Losses"... Samsung Biologics Union Uses Strike as a Bargaining Threat

Samsung Biologics Union to Hold Industrial Action Vote on March 24
"Demanding 14% Wage Increase and KRW 30 Million Incentive"
Massive Investments Weigh on Samsung Biologics

Following Samsung Electronics, Samsung Biologics—another core affiliate responsible for Korea's strategic industries—now faces the risk of strikes by powerful labor unions. Concerns are mounting within the industry that excessive union demands for wage hikes and threats of strikes could undermine the companies' capacity for large-scale future investments, and further, damage national competitiveness.

Union Demands 14% Wage Hike: "Pay Employees the Cost of Strike Losses"

According to the pharmaceutical and biotech industry on March 24, the Samsung Biologics Coexisting Union has suspended the labor dispute mediation process and will conduct a vote on strike action starting at noon on the same day. The central issue is whether or not to grant an unprecedented wage increase. Management has offered a total wage increase rate of 6.2%, a 200% incentive bonus, and expanded shift allowances during negotiations. However, the union is holding firm on its demand for an average wage increase rate of 14%, more than double that proposed by management. Additionally, the union insists on a 30 million won incentive per employee and company stock allocations over the next three years, refusing to make any concessions.

There is growing controversy inside and outside Samsung Biologics over the union's attitude during negotiations. Reportedly, the union argued at the bargaining table that "if a strike occurs, the losses the company would bear would far exceed the costs, so instead, just as companies pay for fire insurance or currency hedging fees, it would be better to pay the equivalent amount directly to employees in advance." This stance is being criticized as falling outside the normal bounds of wage negotiation and collective bargaining.

An industry insider commented, "The union is an important part of the company community, but using potential harm to company interests or added costs as leverage in negotiations crosses the line," adding, "Rather than narrowing mutual differences through negotiation, tactics that rely on threats of strikes to demand monetary concessions may come across as coercion."

Labor Unions Hinder Astronomical Investments in an Era of Industrial Upheaval

Samsung Electronics, which has entered a semiconductor supercycle, is also facing union pressure for wage increases by using the threat of strikes. The Samsung Electronics union has already secured the legal right to strike with an overwhelming 93.1% approval from its members. Their key demand is to effectively remove the cap on the Over-Performance Incentive (OPI). While both companies achieved strong results last year, they are now at a turning point in the industry, especially with the rise of artificial intelligence (AI), which necessitates astronomical investments. The prevailing view is that last year's profits should not simply be regarded as surplus funds for a bonus payout.

An employee of Samsung Biologics is inspecting a bioreactor. Samsung Biologics

The current market reality facing both companies is extremely precarious. Samsung Electronics is engaged in a do-or-die battle for dominance in the high-bandwidth memory (HBM) market. Samsung Biologics, while currently holding the world's largest production capacity at 785,000 liters, cannot afford to be complacent. Competitors are aggressively expanding their capacities—Fujifilm in Japan aims for 700,000 liters by 2028, and China's CL Biologics has reached 700,000 liters within just five years of its founding—making the pace of expansion akin to a full-scale war.

To survive, Samsung Electronics is pursuing a massive investment of 450 trillion won, while Samsung Biologics is planning an investment of 15 trillion won. If the unions' excessive wage demands are accepted and investment capacity suffers as a result, competitiveness in orders and the technological gap are bound to decline rapidly. In particular, biohealth was a star export industry last year with exports of 27.9 billion dollars (about 41.7495 trillion won), and the contribution of Samsung Biologics, which exports 97% of its sales, was crucial.

With global competition intensifying, there are growing concerns that internal risks stemming from forced strikes could become a fatal weakness that erodes order competitiveness. An industry insider remarked, "From the union's perspective, they may feel compelled to focus on immediate bonuses, unsure when the company's growth might slow. Even so, such reckless strikes—which inevitably harm not just the company but national competitiveness—are unlikely to gain support from the industry, consumers, or investors."

This content was produced with the assistance of AI translation services.