South Korea truckers’ strike threatens to disrupt computer chip production

Stoppage by drivers is preventing the flow of key components in the tech industry and could add to global supply chain problems.

A week-long strike by truck drivers in South Korea threatens to be the latest bottleneck in the global supply chain after industry bosses warned that the production of computer chips across Asia faced disruption.

With the worldwide flow of goods struggling with hurdles such as lockdowns in China and the war in Ukraine, Tuesday saw the first concrete sign that the strike was affecting South Korea’s world-leading semiconductor sector.

The Korea International Trade Association (Kita) said a Korean company that produces isopropyl alcohol (IPA), a raw material for cleaning chip wafers, is facing complications in shipping to a Chinese company that in turn supplies wafers to chip manufacturers.

Kita said in a statement that about 90 tonnes or a week’s worth of shipments have been delayed.

The strike has already cost South Korea’s industry sector more than $1.2bn in lost production and unfilled deliveries.

The truckers’ union said in a statement on Tuesday it would continue its general strike and condemned the transport ministry for being “neither willing to talk nor capable of resolving the current situation”.

The union is protesting against soaring fuel prices and demanding minimum pay guarantees. Four rounds of negotiations with the government have failed to find a compromise.

On Friday, police detained several dozen drivers for blocking traffic and disrupting the movement of goods near factories. Fifteen were detained for allegedly obstructing business outside an alcoholic drinks factory near Seoul.

The Cargo Truckers Solidarity union claimed that production at Hyundai’s biggest factory complex was halved last week due to component shortages brought about by the strike.

SOURCE: NEWS AGENCIES