"We Can't Just Let Them Be Damaged Inside"... Samsung Electronics Removes 360,000 Wafers in Preparation for Strike

One Week Until Samsung Electronics Labor Union Strike

Emergency Management Mode Initiated

Production Volume Adjustments Considered to Prepare for Worst-Case Semiconductor Line Shutdown

It has been reported that Samsung Electronics has entered an emergency management system that includes options for adjusting semiconductor production volumes, just one week before the union's planned general strike. This move is seen as an effort to minimize damage by strengthening production volume and quality controls in preparation for the worst-case scenario, in which semiconductor production lines come to a halt due to the union's strike.

According to industry sources on May 14, approximately 15,000 FOUPs (Front Opening Unified Pods, or wafer containers) are currently being removed from dedicated logistics equipment at the DRAM production line of Samsung Electronics' Pyeongtaek Campus. This amounts to roughly 360,000 wafers.

Samsung Electronics Pyeongtaek Campus, Gyeonggi-do. Photo by Yonhap News

Semiconductors are the epitome of a "continuous process" that must run 24/7 without interruption and are extremely sensitive to contamination, requiring strict management within specialized logistics equipment. The act of removing these containers is interpreted as a preemptive measure to prevent the products from being trapped and damaged inside, should the automated logistics system come to a halt due to the strike. In addition, Samsung Electronics is reportedly considering limiting the number of wafers introduced into the process and restructuring its production portfolio to focus on cutting-edge processes such as high-bandwidth memory (HBM).

Previously, on May 13, the Samsung Electronics labor union rejected the Central Labor Commission's compromise proposal regarding incentive payments and announced an 18-day general strike starting May 21. If the Suwon District Court grants Samsung Electronics' request for an injunction to prohibit illegal strike activities, essential personnel for safety and wafer management will be excluded from the strike. However, there are still projections that losses could reach between 10 trillion and 20 trillion won. As it will take at least a month to normalize production after the strike ends, some estimates suggest astronomical losses of up to 100 trillion won could occur.

Against this backdrop, there is a growing sentiment in the business community that the government must initiate emergency arbitration to prevent catastrophic damages. The emergency arbitration power is an exceptional procedure that the Minister of Employment and Labor can invoke when a labor dispute threatens the daily lives of citizens or is likely to severely harm the national economy. Once invoked, all industrial actions must cease immediately, and a 30-day ban on resuming such activities takes effect.

Choi Seungho, Chairman of the Samsung Electronics Branch of the Super Enterprise Labor Union, is attending a post-mediation meeting held at the Central Labor Commission's First Mediation Conference Room in the Government Sejong Building on the 11th. Photo by Yonhap News

Meanwhile, the Central Labor Commission has proposed resuming post-mediation talks with the Samsung Electronics labor union on May 16. Samsung Electronics has also suggested additional dialogue with both the National Samsung Electronics Labor Union and the Samsung Electronics Branch of the Super Enterprise Labor Union.

In response, the Super Enterprise Labor Union stated, "If the company truly wishes to engage in labor-management discussions, we expect concrete proposals on key issues such as transparency in incentive payments, abolition of incentive caps, and institutionalization of these measures. We request a direct response from the CEO by 10 a.m. on May 15. If the company's willingness to engage in genuine discussions on these issues is confirmed, we will participate in further talks."

The main points of contention between labor and management remain the proportion of operating profit allocated for incentive funds and the institutionalization of abolishing the cap on incentive payments. The union is demanding that 15% of operating profit be paid as incentives to the semiconductor (DS—Device Solutions) division and that the "50% of annual salary" cap on incentives be abolished and institutionalized. The company, on the other hand, maintains its position of upholding the existing OPI (Excess Profit Incentive) system based on economic value added (EVA), but has proposed granting additional special incentives if the DS division achieves the industry's top position.

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