Samsung workers’ three-week strike exposed the single-source risk in leading-edge chip supply

The strike was suspended approximately August 1 2024, after roughly three weeks of intermittent industrial action at the Giheung campus in Yongin and the Hwaseong semiconductor complex south of Seoul. Both sites contain production lines critical to Samsung’s DRAM (dynamic random-access memory) and NAND (non-volatile flash memory used in solid-state drives and smartphones) output, as well as the foundry lines — contract production facilities that manufacture chips for external customers — of its Samsung Foundry division.

Samsung’s public position throughout was that the strike had minimal impact on production. Even partial staffing at advanced-node fabs — where cleanroom protocols require uninterrupted process flows — introduces yield risk (the probability that a production run generates defective chips) that is difficult to quantify in real time. The more significant question for supply chain planners was not Samsung’s stated output figures, but what the disruption revealed about substitutability.

During the three-week window in which Samsung’s South Korean lines were under labour pressure, the only alternative source for leading-edge logic at sub-5nm process nodes was TSMC’s fabs in Hsinchu and Tainan. SMIC, China’s largest contract chipmaker, was operating at mature nodes — largely 28 nanometres and above — and was not a viable substitute for the sub-5nm production that Samsung and TSMC alone can supply at scale. This created a temporary situation in which the entire global supply of advanced logic at the most demanding process nodes was effectively dependent on a single geography: Taiwan.

That concentration matters because it intersects with a separate geopolitical risk track. Taiwan’s semiconductor cluster sits within a strait that both the US and China treat as a potential flashpoint. A simultaneous labour disruption in South Korea and military tension in the Taiwan Strait — however low the probability of the latter — would leave the global electronics supply chain without an adequate buffer. Samsung’s 2024 strike did not cause that scenario, but it clarified exactly how thin the redundancy is.

The settlement that ended the strike included a one-time bonus payment and a commitment to further wage discussions, but left unresolved the compensation gap between Samsung and both TSMC and SK Hynix, whose wage increases for 2024 were larger. As long as that gap persists, the NSEU has the basis for a recurring demand cycle. The 2024 stoppage was described by union leadership as a demonstration of what sustained action could achieve. Whether Samsung management treats it as a precedent to contain or a signal to address will determine whether the episode repeats.