The core of this labor-management conflict lies in the sharply divided compensation system between the DS (semiconductor) division and the DX (finished product) division. During this year's wage negotiations, the special management performance bonus system newly established in the DS division created a structure in which performance bonuses worth hundreds of millions of won could be paid according to memory semiconductor performance, but the DX division remained in the relatively small amount of treasury stock payments, creating a sense of extreme deprivation. This gap went beyond simple numbers and spread to a difference in perception of the key contributions that determine the company's performance. The fact that DX department employees staged a protest reminiscent of a mourning house, such as wearing black clothes to work or arranging artificial flowers, can be said to be a symbolic form of resistance that shows that morale within the organization has fallen to the bottom.

The fact that Tae-moon Noh, head of the DX division, sat down directly with the labor union, which is unusual, is proof that management is also aware of the severity of the current situation. The company's plan, which was originally intended to be limited to meetings with working-level staff, took a sharp turn to meetings at the CEO level in the face of the union's hardline attitude. At this meeting, President Roh expressed deep sympathy for the low morale of employees and promised to establish a separate communication channel, but he still maintains a cautious stance on the fundamental issue of distribution of performance bonus resources. The union is requesting payment of 1,000 shares of treasury stock as a separate compensation plan considering the symbolism of the DX sector, but the company is seeking a step-by-step solution, citing difficulties in the business environment such as global demand uncertainty and cost burden.

Behind the labor-management conflict lies a huge economic crisis called ‘chip inflation’ that has hit the smartphone market. The smartphone industry is suffering from an unprecedented rise in component prices, with even Apple CEO Tim Cook predicting an increase in iPhone prices, citing supply shortages and price surges for the first time in 40 years. President Roh Tae-moon also points to the surge in memory prices as the biggest risk to the business, and is struggling between maintaining product competitiveness and securing profitability. With the smartphone market showing its lowest growth since 2013, manufacturers are making the inevitable choice to increase factory prices. This ultimately leads to delayed purchases by consumers and a market recession, creating a vicious cycle that makes it more difficult for Samsung Electronics to improve its profitability.

Amid this crisis, Samsung Electronics is accelerating innovation to find technological breakthroughs. Recently, Samsung developed ‘UFS 5.0’, the industry’s first next-generation memory standard, and developed a strategy to take the lead in the on-device AI era. In addition, we are expanding the healthcare ecosystem by collaborating with Alcedis, a German digital clinical company, to incorporate Galaxy Watch data into medical settings. In particular, the full introduction of generative AI solutions such as ChatGPT and Gemini within the DX division reflects President Roh's strong will to go beyond simply increasing work efficiency and fundamentally reorganize the work method and decision-making speed of the entire organization. It is our determination to overcome uncertain market conditions and regain an overwhelming competitive advantage through technological innovation.