Samsung Electronics Co. and its labor union failed to reach a last-minute wage agreement, according to the Yonhap news service, heightening the risk of a strike that could disrupt operations at the world’s largest memory-chip maker.
The breakdown came after two days of marathon negotiations mediated by South Korea’s labor authorities, with union and management sharply divided over performance bonuses tied to booming AI-related earnings. The union demanded that Samsung scrap the existing bonus cap, allocate 15% of its operating profits to worker bonuses and formalize those terms in employment contracts.
Representatives for Suwon, South Korea-based Samsung and the union didn’t immediately respond to requests for comment after business hours on May 12.
Samsung has proposed providing 10% of operating profit to bonuses, along with a one-time special compensation package that exceeds industry standards, according to Yonhap. Company executives argued that the union’s demands would be difficult to sustain over the long term, it said.
The National Labor Relations Commission, or NLRC, said in statement that it remains ready to provide further post-mediation support at any time should both labor and management jointly request it.
The failed talks underscore rising tensions across the country’s technology sector as workers push for a greater share of profits generated by the AI infrastructure boom. Union leaders have pointed to rival SK Hynix Inc., which last year agreed to allocate 10% of annual operating profit to a performance bonus pool.
The union has threatened an 18-day strike beginning May 21, raising concerns over potential disruptions to Samsung’s semiconductor operations at a time when it competes fiercely with SK Hynix and Micron Technology Inc. in the memory market. A prolonged labor dispute could complicate Samsung’s efforts to accelerate development of next-generation semiconductors.
The dispute comes as South Korea grapples with broader questions over how the gains from the AI boom should be distributed.
Investors are closely watching the development because any disruptions at Samsung could ripple through the global semiconductor supply chain.
“There are mounting concerns that any significant production disruptions or operational uncertainty at Samsung Electronics could place additional strain on the global memory semiconductor market, potentially worsening supply bottlenecks, price volatility, procurement uncertainty and broader supply chain instability,” the American Chamber of Commerce in Korea said in a statement.
Investors are also monitoring Samsung’s legal efforts to block the planned strike.
On May 13, the Suwon District Court is scheduled to hold a second hearing on Samsung’s request for an injunction to restrict the union’s planned strike. The court is expected to decide by May 20 whether to grant the injunction, which seeks to ban occupation of key facilities and mandate that safety-critical staff remain on-site to prevent equipment damage, potentially altering the scope of the walkout set for May 21.
