"All Major Corporations Could Leave"... Business Community Fears Overseas Factory Relocation Due to Strike Risks

Business Community on High Alert Ahead of Unprecedented General Strike on May 21

"Samsung May Look Overseas Like Hyundai Motor"

Concerns Over Vicious Cycle of Domestic Job Losses and Technology Outflow

As the general strike at Samsung Electronics scheduled for May 21 approaches, concerns are mounting within the business community that ongoing labor-management conflicts could spur a reduction of domestic production bases and an increase in overseas investment. If risks of production disruptions grow amid intensifying global competition in semiconductors, there are predictions that companies may prioritize investing in overseas production lines rather than in Korea.

On May 18, Lee Changhan, former Vice Chairman of the Korea Semiconductor Industry Association, expressed his deep concerns in a phone interview with The Asia Business Daily, stating, "If the labor-management issue becomes serious, Samsung—like Hyundai Motor Company—will also avoid building factories in Korea. When factories leave, both people and technology follow." He pointed out that Korea’s rigid labor market and risks from labor-management conflict could lead companies to avoid investing domestically and instead relocate factories overseas.

The second post-adjustment meeting between Samsung Electronics' labor and management at the Central Labor Relations Commission (CLRC) is scheduled, with a view of the Samsung Electronics headquarters in Seocho-gu, Seoul, on May 18, 2026. Photo by Dongju Yoon

Previously, Hyundai Motor Company has been cited as a prime example of a company that continuously expanded its overseas production bases due to repeated labor-management conflicts and high production costs. Since building its Asan plant in South Chungcheong Province in 1996, there has not been a single large-scale car assembly plant established domestically for over 25 years. Instead, the company consistently invested in overseas locations such as Alabama in the United States, the Czech Republic, and Brazil.

According to an industry insider, "In 2012, then-Chairman Chung Mongkoo of Hyundai Motor Group is known to have ordered a halt to further expansion of factories both in Korea and overseas. 2012 was also the year when the Hyundai Motor labor union carried out 12 strikes during wage negotiations, resulting in the largest-ever production disruption amounting to 1.7 trillion won." At that time, Chairman Chung reportedly told executives, "Our production capacity is already sufficient. There is no need to build more factories," and instead emphasized a strategy of strengthening product quality over expansion.

Within the business community, the dominant view is that Samsung Electronics, now facing the risk of catastrophic production shutdowns, will also inevitably become more cautious about investing in domestic production lines in the medium to long term. In particular, semiconductors are the epitome of continuous processing, requiring precise 24-hour operation, and even a brief halt can cause massive losses by forcing the entire line’s wafers to be scrapped.

If the general strike set to begin on May 21 lasts for 18 days, it is estimated that restarting the shutdown lines and normalizing the yield rate (percentage of non-defective products) would take an additional two to three weeks. As a result, the total period of production disruption would exceed one month.

Currently, Samsung Electronics is locked in fierce competition with global rivals in the high bandwidth memory (HBM) and foundry (contract semiconductor manufacturing) markets. There are concerns that a prolonged strike could weigh heavily on the company’s future growth engines and competitiveness. Furthermore, major countries such as the United States, Japan, and those in Europe are offering large-scale subsidies and tax incentives to attract semiconductor production facilities, which is cited as another limiting factor.

Kim Yongseok, Distinguished Professor at the College of Semiconductor at Gachon University, commented, "It is unlikely that Samsung Electronics will immediately relocate its memory factories abroad because of this strike, but the System LSI and foundry divisions may seek to increase investments in the United States. As Samsung Electronics hesitates, there is a strong possibility that Chinese companies expanding their production lines could secure supply contracts instead."

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