Samsung's semiconductor division now appears destined for partial paralysis amid a general workers' strike that looks all but certain, especially after last-minute negotiations have collapsed again, with nary a reprieve in sight.
Samsung's unionized workers now appear determined to go on an 18-day general strike on May 21
As per the reports that are just trickling out of South Korea, the last-minute negotiations between Samsung's unionized workers and its management have collapsed, setting the stage for the planned 18-day general strike to commence on May 21.
In what is a rare bit of good news though, the union has expressed its resolve to "not stop trying to reach a settlement even during the strike."
As most of our readers would know by now, Samsung's union workers are currently demanding 15 percent of the company's annual operating profit, which amounts to around $30 billion, in bonuses. Otherwise, these union workers are determined to go on an 18-day strike that would begin on May 21 and last until June 07.
Even though Samsung's semiconductor division - the proverbial ground-zero for the planned strike - is highly mechanized, disruption to ancillary services can still jeopardize some of its production cadence.
In fact, according to KB Securities, if just 30 to 40 percent of Samsung's union members were to participate in the strike, the global supply disruption could reach 3 to 4 percent for DRAM and 2 to 3 percent for NAND. This comes as global DRAM inventories already sit at depleted levels: enough to satisfy just 4 to 6 weeks of demand.
Of course, today's development comes as a South Korean court had issued an injunction earlier this week, barring any activity that could disrupt normal operations. Concurrently, the court had chosen to impose a daily fine of 100 million won ($66,488) on Samsung's unionized workers in case of non-compliance.
Finally, it seems the South Korean government has also failed in its gambit to force a compromise after issuing threats earlier this week to invoke its 'Emergency Arbitration Authority,' one that can legally suspend strike action for up to 30 days.
As for the global memory and consumer electronics spheres, further price pressures and relentless disruption appear to be the order of the day.
Update
It appears Samsung's negotiations roulette continues unabated amid chatter of a resumption in talks, this time under the supervision of South Korea's labor minister. The clock is ticking.
Update #2: Samsung's management and union representatives have reached a tentative deal. Head to our dedicated post for additional details.
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