Samsung is gradually winding down factory production ahead of an 18-day strike across its facilities. South Korean news outlets report that the company is slowing manufacturing operations to enter emergency management mode, a step that limits production capacity as worker shortages begin to stall production lines.
According to the Seoul Economic Daily, about 43,286 factory workers have joined the picket line for the strike, which is more than half of the entire semiconductor division (DS unit) labor force. In emergency mode, Samsung will restrict the number of new wafers introduced into the production process, which is a long and demanding procedure that typically runs 24/7. The factories can still operate at minimum production capacity because of extensive automation, but operating the machines still requires human involvement.
TrendForce estimates that about 3-4% of the world’s global DRAM supply could be disrupted, along with about 3% of the world’s NAND Flash supply. With DRAM and NAND Flash shortages already at their peak, the disruption is expected to worsen global supply chain pressure. The targeted production lines in the strike are for HBM, (LP)DDR5, and some custom logic production.
If customers see continued uncertainty around Samsung’s production capacity, some may shift orders to rivals such as SK hynix or Micron. With more than half of the workforce absent, there will not be enough factory workers to keep production lines running, and output is expected to drop significantly.
