Global drugmakers are facing a new supply-chain risk as labor disruptions spread to one of Asia’s largest contract drug manufacturers, potentially threatening the production reliability that pharmaceutical companies depend on for long-term outsourcing contracts. For U.S. drugmakers, suppliers and investors, Samsung Biologics’ planned three-week strike could test whether labor stability is becoming as important as capacity and cost in the global contract development and manufacturing organization, or CDMO, market.
Samsung Biologics’ union said on October 7 that it will launch a second full-scale strike on October 26, with the walkout scheduled to last three weeks. That would be more than four times longer than the five-day strike the union staged from May 1 to May 5.
The dispute centers on wages, performance incentives and personnel policies. Samsung Biologics has proposed a 6.2% increase in base pay and a lump-sum payment, arguing that employee compensation and benefits already rank among the most competitive in South Korea’s pharmaceutical and biotechnology industry.
The union is demanding a 9.5% increase in base pay and performance bonuses equal to 15% of operating profit. It argues that fixed salaries remain below those of competing companies when differences in job grades and tenure are taken into account.
The union is also seeking changes to personnel policies and greater transparency in management practices. Some of those demands are linked to internal personnel documents disclosed in November 2025, which the union says raised concerns over performance ratings and plans involving lower-performing employees.
The labor dispute has already affected operations. Samsung Biologics estimated that the five-day strike in May caused about 150 billion won in losses, or roughly $105 million, including costs related to discarded pharmaceutical products. A three-week strike could produce substantially larger losses if production disruptions intensify.
For investors, however, the larger issue is customer confidence. CDMOs compete on manufacturing capacity, cost and regulatory expertise, but pharmaceutical customers also require reliable production schedules. A prolonged dispute at a major supplier could complicate manufacturing plans and make some customers more cautious about entering large, long-term supply agreements.
Hana Securities said on October 6 that production stability is essential for large-scale, long-term contracts and that an extended labor dispute could unsettle customers. Daishin Securities similarly described labor relations as a near-term uncertainty, highlighting the length of the planned second strike as a key variable for production disruptions.
Samsung Biologics Chief Executive John Rim warned employees on October 2 that production disruptions and delays could affect new orders and potentially damage long-standing relationships with existing customers.
The conflict has also expanded to Samsung Electronics, the second-largest shareholder of Samsung Biologics. The union has asked Samsung Electronics to negotiate over compensation and personnel policies on issues it considers to fall within the electronics company’s role as an effective employer.
The union said it could seek intervention from South Korea’s labor authorities if Samsung Electronics does not follow the required bargaining procedures.
Management and labor are increasingly taking opposing legal positions. Samsung Biologics has said it will respond legally to what it considers unlawful industrial action and apply a no-work, no-pay policy during work stoppages.
The company has also filed complaints against union members over alleged interference with operations during the May strike. In one case, authorities recently declined to refer a union member for prosecution after the company accused the employee of disrupting production by monitoring other workers and encouraging them to leave during the strike.
For U.S. pharmaceutical companies and investors, the dispute highlights a broader vulnerability in the global CDMO model. As drugmakers outsource more manufacturing, the value of a supplier increasingly depends not only on scale and cost but also on its ability to maintain uninterrupted production.
If the three-week strike begins as planned on October 26, its impact on production, customer relationships and new contracts will be closely watched as a measure of how labor risk could reshape the economics of global pharmaceutical outsourcing.
