"Equipment Shutting Down": Union Targets Samsung's AI Chip Plants

The artificial intelligence boom faces a new challenge this week: The largest union of Samsung Electronics declared an indefinite strike on Monday. By late week, Bloomberg reported the union shifted strike efforts to a critical AI memory plant. 

Let's begin on Monday when the National Samsung Electronics Union announced an indefinite three-day strike, accusing management at the world's largest memory chip manufacturer of being unwilling to negotiate a new labor contract. 

"Management has no intention of dialogue. We have clearly identified line production disruptions and the company will regret this decision," the union wrote in a statement, adding, "Management will eventually relent and come to the negotiating table."

Bloomberg reports that thousands of unionized workers took part in the three-day walkout earlier this week. The company stated, "Samsung Electronics will ensure no disruptions occur in the production lines," noting that it "remains committed to engaging in good faith negotiations with the union." 

By Friday, Bloomberg provided an update on the union's labor action strategy, which appears to have shifted and targeted a high-bandwidth memory production in Pyeongtaek, South Korea. This is the site of the company's most advanced AI memory chip plant. 

Several hundred employees joined protests Thursday and Friday in front of Samsung's high-bandwidth memory site in Pyeongtaek, south of Seoul, after the union called a general strike this week. -BBG

Even though several hundred is far less than several thousand, union leaders told the media outlet that they're now targeting the AI memory chip plant with strikes in hopes of bringing management to the table in a new labor deal. 

More from Bloomberg explaining the importance of the Pyeongtaek plant:

The Pyeongtaek site is the nerve center for Samsung's efforts to carve out a slice of an important market. The chipmaker's in the process of trying to convince Nvidia Corp. to use its high-bandwidth memory — a prerequisite for it to catch smaller rival SK Hynix Inc. in the booming AI arena.

Lee Hyun-kuk, deputy secretary-general of the union, said targeting high-end chip production lines is "the most effective" way to bring management to the negotiating table. 

We noted earlier that Samsung assured no chip production following the labor action by the union. However, on Thursday, the head of the union, Son Woo-mok, told Bloomberg TV that he was hearing significant disruptions at factories. 

"The company is saying that there is no production disruption, but that's not true," Son said, adding, "I'm hearing that there's a lot of equipment that's shutting down, but they don't have the manpower to handle it. So there's a lot of equipment that's going idle."