Samsung employees go on strike for three days

Samsung Electronics union is scheduled to begin a three-day strike on Monday and has warned that further actions may be taken against the country's most powerful conglomerate later.

The National Samsung Electronics Union (NSEU) has around 28,000 members, accounting for more than one-fifth of Samsung's total workforce in South Korea. The union is demanding the company to improve its performance-based bonus system and provide an additional day of annual leave for employees.

It is currently unclear how many workers will participate in the strike, but a union survey showed that as of Monday morning, about 8,100 members indicated they would join the strike.

Lee Hyun-kuk, a senior union leader, stated in a YouTube live stream last week that if the workers' demands are not met, there may be another round of strikes after the three-day stoppage.

The union plans to hold a rally near Samsung's headquarters in Huacheng City, south of Seoul, on Monday morning.

However, analysts suggest that this strike is unlikely to have a significant impact on chip production as most of the output of the world's largest memory chip maker is automated.

Last month, the union held a strike using annual leave for the first time, but the company stated that it did not affect production or business operations.

Analysts point out that while this labor movement may not have a significant impact on output, it indicates a decrease in loyalty among employees of this global top-tier chip and smartphone manufacturer, posing another challenge for Samsung in the fierce competition in the field of AI application chips.

Samsung estimated on Friday that its operating profit for the second quarter will increase more than 15 times, driven by the AI chip boom which has boosted semiconductor prices, lifting profits from a low base a year ago. However, its stock performance has been lagging behind its Korean chip competitor SK Hynix.

Samsung's Second Quarter Profit Soars on AI Chips

South Korean tech giant Samsung Electronics announced a 15-fold increase in its second-quarter earnings due to the AI chip boom.

Analysts state that the company's sales in the world's largest memory chip maker, with over 70% market share in high-bandwidth memory (HBM) and other AI chips, will continue to achieve substantial profit and sales growth in the coming months.

Samsung stated in South Korean regulatory filings that its chip prices for April to June are expected to reach 104 trillion Korean won (7.5 billion US dollars), a 1452% increase from the same period last year of 670 billion Korean won on a consolidated basis.

The initial quarter profit exceeded expectations at 83 trillion Korean won. If confirmed by Samsung Electronics earlier this month, the second-quarter profit would reach 108 trillion Korean won.

Second-quarter data is expected to reach 104 trillion Korean won The company stated that its sales in the second quarter may increase by 23.3% compared to the same period last year, reaching 7.4 trillion yuan.

Samsung plans to announce detailed quarterly performance on July 31, including net profit and segment performance. Following better-than-expected financial results, Samsung's stock price rose by 3% on Friday to close at 87,100 won, outperforming the Kospi index's 1.3% increase.

Although Samsung did not provide detailed performance for each department, the profit of the Device Solutions (DS) division responsible for the chip business may be higher than the first quarter, thanks to the increase in average selling prices of DRAM and NAND.

Analysts expect Samsung's chip business sales in the second quarter to reach 6.5 trillion to 7 trillion Korean won (USD 4.7 billion to 5.1 billion), compared to 1.9 trillion won in the first quarter. Analysts stated that the surge in demand for DRAM has driven up chip prices, including HBM for AI chipsets and chips for data center servers and tools running AI services.

According to market research firm TrendForce, DRAM chip prices in the second quarter increased by 13%-18% compared to the first quarter, while NAND prices rose by 15%-20%. Due to seasonal weakness, Samsung's device business (including smartphones and laptops) may have an operating profit of 2.3 trillion won in the second quarter, lower than the 3.5 trillion won in the first quarter.

Looking ahead to the third quarter, analysts predict that Samsung will continue to have a favorable outlook for the coming quarters due to strong demand for AI chips, the launch of the new flagship Galaxy smartphones, and the debut of the health tracker Galaxy Ring in the third quarter. On Thursday, Samsung officially established a dedicated HBM and advanced chip packaging team, with its new semiconductor division head vowing to surpass local competitors and HBM leader SK Hynix.

As part of Samsung's organizational reform, Samsung Electronics CEO Michael Lee is the President and CEO of the group, as well as a member of the group's board of directors. Currently, Samsung Electronics has taken on the role of Chairman and CEO of the group. Currently, Samsung Electronics has taken on the role of Chairman and CEO of the group.

Analysts expect general DRAM prices to remain stable in the third quarter as chip manufacturers primarily use their facilities to produce higher-profit HBM chips, leading to tight supply of commodity DRAM.

Author: Semiconductor Industry Observer, Source: [Semiconductor Industry Observer](https://mp.weixin.qq.com/s?__biz=Mzg2NDgzNTQ4MA==&mid=2247745129&idx=2&sn=ad9e5044f5c18265140b226687921735&chksm=ce6e3c9ef919b58883e81d6c6893899410ec08e8e5a79d605b1f9004de75ae838a46e2db8f57&mpshare=1&scene=23&srcid=0708HzSYLGklgVOeTZLFeU6u&sharer_shareinfo=243e20277bdf568b60d98c62924ee994&sharer_shareinfo_first=243e20277bdf568b60d98c6 2924ee994#rd), original title: "Samsung employees, strike for three days"