Samsung holds desperate final talks with union over 18-day chip factory strike that could cost $20 billion —government-mediated summit seeks to avert industrial action that could hit HBM production

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PartitaDminor@reddit

It wold also affect all consumers in general. Why does the headline exclusively focus on HBM?

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Nicholas-Steel@reddit

Only affects consumers if they intend to maintain same profit margins for the upper staff.

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AbeFromanEast@reddit

I bet giving the workers the salary increase they want would cost a lot less than $20 billion.

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Why bet, when you can read the article? > They estimate that allocating 10% to 15% of operating profit as performance bonuses and raising base salaries by 5% would generate KRW 21 trillion to KRW 39 trillion ($14.3 billion to $26.5 billion) in additional labor costs above current projections.

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based_and_upvoted@reddit

OK so at most 15% of PROFIT... I don't see a problem here. Where would those 15% go, if not for the workers that enabled such huge profits? Your quote implies they made more than 175 billion USD in profit.

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shimszy@reddit

You might want to check your numbers here lol. I'm all for the worker but they do literally want 7 figure annual bonuses for all employees which would be more than a decade worth of wages for the average Korean employee.

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RealThanny@reddit

Rightfully so. The companies are leveraging the insane demand for RAM to reach record margins. There's no reason that should go only to the executives and shareholders. The people doing the actual work to make the products should get a share as well.

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Capital-Froyo-4359@reddit

People don't make chips.. machines do. The people just maintain the machines and replace parts etc.

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94746382926@reddit

Sooo, what's your point then?

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Capital-Froyo-4359@reddit

These people don't deserve shit.

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94746382926@reddit

Your logic is that machines make the products so the people operating and maintaining them shouldn't benefit from profit sharing. Obviously you aren't saying an inanimate object should be receiving it (even though that's logically where your argument is going). So then if not the people running the machines, or fixing the machines, then please tell who you think deserves it?

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Capital-Froyo-4359@reddit

Big problem with trying to have any sort of intelligent discussion on Reddit is the fact seemingly nobody here has taken even a single Economics class. Like the most basic division that exists is between Capital and Labor. The fact you don't understand that these machines were bought with capital and the people who invested that capital are the ones who should benefit is mind-blowing to me.

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94746382926@reddit

I understand that, it's obvious what you were implying (capital deserves the profits because they own the machinery). It's boilerplate economics, you're just regurgitating it without giving a reason why ownership entitles shareholders to the entire profit. I was trying to eke out if your argument was as simple as you just restating basic econ definitions or if you actually had something more interesting underneath. Labor is just as necessary as capital. Those machines don't produce shit when the workers who run and maintain them go on strike. The article above is literally exhibit A.

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-WingsForLife-@reddit

The guy's also forgetting that if it was just the machines then someone with enough capital could just buy them and be competitive, and we know that's not the case with modern semiconductors.

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R-ten-K@reddit

Good bot!

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ritz_are_the_shitz@reddit

coooool those machines wouldn't do shit without those people there, that's why the c-suite is sweating bullets at the thought of this strike. labor is entitled to the value it produces.

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Capital-Froyo-4359@reddit

As i already explained; labor doesn't produce much value here. They just have the ability to stop the machines from producing value. These people are just in the right place at the right time to capitalize on the situation. I ts fundamentally no different than a gas station doubling their prices right before a hurricane. The value of the gas is almost entirely the result of the mining and refining workers who came earlier in the supply chain.. but because that has station owner controls the pump he can jack prices WAY up in a shortage.

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R-ten-K@reddit

Their demands are based on the competitive bonus structures in their segment of the labor market.

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justice_for_lachesis@reddit

Their competitor is paying that much. Is it really so outlandish to expect that they pay similar to their competitor?

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94746382926@reddit

Not necessarily, in this case the workers are asking for almost a 1 million dollar bonus a piece just FYI. Definitely not a typical labor negotiation, that being said they're using their leverage well can't blame em.

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ML7777777@reddit

I hope they get their near million dollar bonus as its going to radically change many peoples lives. SK Hynix gave around $500K this year and around $900K for the following fiscal year based off their record profits. Samsung workers want the same and they should get it.

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DominiqueBlackG@reddit

This is a dumb take that doesn't understand how real world work, unions are acting like cartels against the rest of the other workers and SK economy here. If you have a near monopoly/oligopoly sector like semiconductor, and the unions of that specific sector want a extreme rise in compensation, it means the company will have to rise prices to other sectors as well = other people, normal workers will pay more for the same products, normal workers will slave around for the stronger union cartel of the oligopoly sector. Stronger unions should NOT use their power to prevail on other unions, workers who happened to work in the semiconductor industry should not become aristocrats because their sector happened to be booming for the time around. This is why in many places unions failed successful companies and made economy worse for everyone around other than the stronger union members that eventually once millionaires can quit their job and leave the burden of the problems caused by them onto the next younger workers. Unions should be nationalized, meaning every decision should be taken considering ALL the workers, not taking the side of the monopoly/oligopoly sector, rise costs on the economy to make 70 thousands members millionaires over night, and then when the company starts losing market share to TSMC or Intel, those members can simply quit and leave the company to the next workers who will have to clean up their mess.

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DominiqueBlackG@reddit

Yea downvote me, you guys read "union" and you think automatically it's a good thing and a union doesn't mess up with other unions workers, you have no idea of how it does work in the real world, the "double labour market" that is present in SK where the unions in strategic sectors of the biggest Chaebols gain 50/60% more then other workers in smaller unions already (not counting bonuses), because one has the bottleneck power and the others don't. So if you work in a sector that depends from the "bottleneck" and they rise their operating costs, that cost goes down to your company, their company is the "bottleneck" so will keep working anyway, your company will face issues and will not be able to pay you more and when you buy their products you will also pay more for that, enjoy slaving and sucking the dicks of the elite unions because you like socialism policies. Unions can be okay, I am not saying all unions are like this, but this is THAT case.

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xsorr@reddit

So what are you suggesting? That all 15 operating profits from all companies gets split across every single union member? Sounds fine to me too

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DominiqueBlackG@reddit

You are still thinking about samsung alone. 15% operating profits (not even net profits) is a lot, the extra cost will go down onto other workers of other companies. Best way and most responsible way to do this is over time stock diluition to employers, so employers will get yearly dividends from their stocks + value growth of the stock if the company goes well overtime. Which is what a cooperative does: Sharing not only the profits but also the risk between workers by letting workers own part of the company (stock/share diluition), this make workers more responsible, and not just want to cash grab and quit few years from now.

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xsorr@reddit

Im not talking about samsung alone. Im talking about every single business, since you said nationalise unions. So if its 15pc across all business operating profits, split across all workers, no problem. Why do you think stock options stop them from getting a quick million? Nvidia employees are technically millionaires.. I dont get how bonuses from operating profits has no risk or responsibility? If they make no profit or less profit, it still affects them? Im sure the employees dont care if they are receiving 15pc worth of operating profits in shares anyway. Regardless of which elite is being supported, a levelled playing field is better than one elite having everything

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DerpSenpai@reddit

SK Hynix employees have not yet received it and such a huge sum for this amount of people will inevitable lead to inflation. They should negotiate a % to a 401k for their retirement IMO

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GoblinEngineer@reddit

why would Korean employees need an American retirement vehicle?

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DerpSenpai@reddit

Because I'm European and dont know the name they use in Korea? Here it's called PPR

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AkazaAkari@reddit

Meanwhile all Kioxia employees get is the [62 cents in the Flying Dutchman's pocket](https://www.youtube.com/watch?v=GCn8oiNJrwQ).

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TheBraveGallade@reddit

The main problem i and most korean people have with a lot of korean unions is that they are very selfish. They routinely throw contracted workers part time workers and contracted companies workers under the bus just for thier own gain. Some have pushed so far as to ask for hereditary job positions.

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Ramongsh@reddit

>They routinely throw contracted workers part time workers and contracted companies workers under the bus just for thier own gain. Unions are only there for their own members. Maybe the part-time workers should unionize as well. >Some have pushed so far as to ask for hereditary job positions. I would love some source for that claim.

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psi-storm@reddit

That depends on the country. In Germany only the biggest union for a location is allowed to negotiate, so they have a responsibility to all workers there.

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Capital-Froyo-4359@reddit

I feel like most of the rabid pro-union people on Reddit have never actually dealt with a union IRL. These unions in real life aren't looking to be some sort of shining political ideal.. they're almost all blatantly corrupt and just looking to rent seek on certain industries by buying politicians and making entry into the union entirely based on nepotism.

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Ramongsh@reddit

>These unions in real life aren't looking to be some sort of shining political ideal.. they're almost all blatantly corrupt and just looking to rent seek on certain industries Unions definitely aren't shining beacons of idealism, but that also isn't their role or purpose. Their role is to deal with business and capital to get better working conditions and pay for their members, and only for their members. The alternative to union is no organisation to stand up to business' or capital, which just leave us all worse off.

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PhyrexianSpaghetti@reddit

By this logic one should never go to a doctor because there have been bad ones, and just let a disease kill you

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althaz@reddit

Unions are fucking terrible, everybody knows it. But because corporations are an order of magnitude worse, they're also necessary.

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TheBraveGallade@reddit

don't get me wrong, unions existing as an option is almost always better then if they are illegal, and a lot of western unions are much better about actually bartering and being just... better people? not always, but they seem so compared to korean ones. if I'm correct sweeden and germany is the case of unions being sensible yet powerful enough so that minimum wage as a concept doesn't need to exist. I think one of the reasons why a lot of korean unions are bad (not all- public sector unions tend to be pretty good) is because everyone who's actually sensible and idealistic and 'for the workers' up to the late 80s basically died to be being labled a communist, so only individualistic people remained to form unions.

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Capital-Froyo-4359@reddit

Not saying unions should be illegal.. but unions where entry is only available to the relatives of existing union members should be. And obviously so should paying off politicians.

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TheBraveGallade@reddit

they are trying to be the new aristocrats bascially.

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BorderCare@reddit

I feel that only workers who work in DS (semiconductor wing which covers memory, system LSI/processors, and foundry) division should receive the hefty pay raise and bonuses. Unsure why workers in the DX (device experience which covers smartphone, TV, and home appliance) division feel entitled to the profits the DS division generated as memory is a highly cyclical business.

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titanking4@reddit

Well because the division you work at within certain companies happens to be more or less random chance. “Why foundry businesses get huge bonus even though Samsung foundry failed to get any “bleeding edge” customers. HBM is the volume mover right. And those don’t use leading edge nodes.” And it heavily damages company culture when some of your coworkers just get heavily rewarded because they happen to have chosen to work at a business unit that the world (independent from them) decided they wanted an endless supply of. The employees of a company should be acting as one unified team to achieve goals. Not trying to step on each others toes and hold jealously or resentment.

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blackbalt89@reddit

Oh no, AI production will have to slow. *Oh the horror.*

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Minced-Juice@reddit

Good. Was it desperation when they raised prices without increasing supply, through backhanded deals with the likes of Sham Altman's company?

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Capital-Froyo-4359@reddit

Just to clarify; nobody is actually desperate here. Workers want million dollar minuses and investors want multi-billion dollar profits. Both sides are making tons of money.

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AdmiralKurita@reddit

Sounds like the upcoming MLB labor dispute.

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Wide_Lock_Red@reddit

People trying to buy computer chips are.

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Capital-Froyo-4359@reddit

They don't get a say.

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Sevastous-of-Caria@reddit

Well dont buying is a say aswell. Good luck convincing people with severe captive enthusiasm inelasticity.

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Specialist-Buffalo-8@reddit

Are you sure? If i was a worker i'd really like a 500k+ increased bonus :D

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self-fix2@reddit (OP)

Even the government is making billions through income taxes

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lally@reddit

Supply will come, these things take time to ramp up. More supply means more money.

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Wide_Lock_Red@reddit

Not good for people looking to buy computer chips.

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self-fix2@reddit (OP)

Even the government is making billions through income taxes

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taurussilver27@reddit

This is probably the reason why big companies want to replace human employees with ai. People act like this when they see money and want to take a part of it.

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KolkataK@reddit

They want Samsung to share the enormous profit they have made guaranteed as part of their salary. SK Hynix does the same thing, they share part of their extra profit to the workers. They are essentially protesting for parity rather than asking for straight up cash for no reason

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Capital-Froyo-4359@reddit

Parity isn't really parity though. SK Hynix only makes memory so their entire company is making insane profits. Samsung is a massive conglomerate and many parts of the company are bleeding money bad (such as logic fabs).

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ForgottenCrafts@reddit

Exactly, such a huge conglomerate should afford to share between 10-15% of the \*profit\* of one division to its workers.

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Capital-Froyo-4359@reddit

Only certain workers. That's the problem ya know. One worker will get $500,000 bonus and another will get $5,000.

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ForgottenCrafts@reddit

It is obvious that those who contributed should get the bonus.

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ML7777777@reddit

> many parts of the company are bleeding money bad (such as logic fabs). Why lie about a publicly traded company? You do know you can view the financials, right? No major part of Samsung is bleeding money, even if a business unit has a quarter that was lower than last years (like automotive devices) they are all still making profit and the lower volume is due to -- memory constraints! Even parts of Samsung have to compete for the same memory inventory as everyone else on the planet.

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VastTension6022@reddit

Yeah fuck those greedy workers that want some of the value their labor produces.

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Capital-Froyo-4359@reddit

Their labor isn't producing this value.. collusion in the industry is.

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TechTechTerrible@reddit

You’re right. All the profits should go to me and the rest of you should starve to death. What a good system you’ve designed.

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Stilgar314@reddit

When billionaires take their upper hand to squeeze as much money as they can is nothing but natural and to be expect, if employees seize an opportunity to make a coin is unfair.

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Kougar@reddit

People also act like that when they're paid/compensated less than equivalent positions at competitors, yet their company suddenly strikes gold and begins raking it in by the arm load. If employees were treated as an investment in the company instead of a balance sheet cost to always minimize and casually throw away on a whim there would be much less of this happening.

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Capital-Froyo-4359@reddit

Chip fabs are already extremely highly automated. That's WHY these employees can demand so much.. because there are so few relative to the value being produced. Of course that's also why there's such resistance to these insane bonuses.. because 98% of the value is a result of the equipment in the fabs and not the workers.

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tes_kitty@reddit

A number of those employees are probably the people you call when there is something wrong with that automation and it needs fixing. Knowing where to look and what to change in such a case can make the difference between value being produced and non-working junk being produced.

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Vb_33@reddit

Yes eventually the AI will be superior to humans to the point humans won't be the ones pulling the strings.

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