South Korea’s truck drivers, on strike for over a week, are creating a hinderance in the global supply chain. Industry executives alerted that computer chips production would affect economy in Asia.
In protest for minimum wages and rising prices, truck drivers went on strike since last week, disrupting activities in the ports and factories of Asia's fourth largest economy.
While the flow of merchandise throughout the world is facing challenges including China lockdowns and the Russian invasion, the strike will have impacts on the country’s semiconductor sector.
The Korea International Trade Association (Kita) mentioned a Korean company producing isopropyl alcohol (IPA), saying that it is facing challenges to ship to a company in China, which offers wafers to chip manufacturing companies.
In a statement, Kita also said that almost 90 tons of shipments have been postponed as a result.
The ongoing strike has caused over $1.2bn “in lost production and unfilled deliveries” in the country’s industry sector.
On Tuesday, the Korean truckers’ union in its statement declared it would go on its strike. It also blamed the transport ministry, which is not interested in negotiation and not able to sort out this situation.
Objecting against high fuel prices, drivers are engaged in a work stoppage, asking for minimum pay guarantees. So far, four rounds of talks have been held with the government but all to no avail.
South Korea’s police, on Friday, arrested several truck drivers who had blocked traffic, hindering transport of goods from factories.
Following chip shortages caused by the strike, production in Hyundai’s biggest factory compound lowered to half, claimed the Cargo Truckers Solidarity union.
Inflation rate in South Korea has seen a decade-long rise in May, according to the official figures. South Korean Prime Minister Han Duck-soo, on Tuesday, called for an end to the strikes, saying they would hit a severe blow to the country's export-oriented economy.
South Korea is among the largest exporters of memory chips and the world’s chip giants of Samsung Electronics, as well as major automakers such as Kia and Hyundai Motors work in the country.