An aerial view of Leeno Industrial's facility in Gurang-dong, Gangseo-gu, Busan [Leeno Industrial]
An aerial view of Leeno Industrial's facility in Gurang-dong, Gangseo-gu, Busan [Leeno Industrial]

The union at Leeno Industrial, Busan's largest company by market capitalization and the world's No. 1 maker of semiconductor test sockets, declared an indefinite general strike Thursday, sending alarm through the regional business community.

The Leeno Industrial chapter of the Korean Metal Workers' Union's Busan-Yangsan branch escalated a partial strike that began Monday into a full walkout Thursday.

Leeno Industrial produces pins and sockets used to test semiconductors before sale, supplying global chipmakers including Taiwan's TSMC and US firms Nvidia and Qualcomm.

Business groups in the region warn that the full strike will deepen sales losses that already reached 2 billion won ($1.35 million) per day during the partial walkout, and that a prolonged dispute could allow Japanese and Taiwanese rivals to seize the company's top global market position.

Wages are at the heart of the labor dispute. The union is demanding a regular bonus worth 800 percent of monthly pay, a performance bonus equal to 15 percent of operating profit, a settlement bonus of 20 million won, new family, seniority and job allowances, and new welfare benefits covering family medical expenses.

Leeno Industrial currently spends 50 billion won annually on wage-related costs. The union's demands — excluding the 15 percent operating-profit performance bonus — would alone amount to 130 billion won.

The company is pressing ahead with efforts to persuade the union to continue negotiations at a session the union proposed for July 30, staking its survival on reaching a deal.

"Taiwanese and Japanese competitors are aggressively pushing into the global semiconductor components market, and Leeno Industrial has worked hard to build its competitive edge as a homegrown Busan company," an official at the Busan Chamber of Commerce and Industry said. "Given the nature of the semiconductor market — where customers who leave rarely come back — a prolonged strike would inflict enormous damage on the regional economy."


cityblue@heraldcorp.com