Seoul: Samsung Electronics Co.'s largest labor union announced on Friday that it will proceed with a major strike planned for next week, despite the company's offer to resume talks without preconditions. This decision by the union comes in response to an official proposal from management aimed at preventing an 18-day strike scheduled to start next Thursday, which could significantly affect production at the world's leading memory chipmaker.
According to Yonhap News Agency, the union remains firm in its stance and has no plans to engage in further discussions unless its principal demands concerning performance-based bonuses are addressed before another round of government-mediated talks proposed for Saturday. Choi Seung-ho, head of the largest labor union at Samsung Electronics, expressed readiness to negotiate after June 7, which is the day following the planned strike's conclusion. He emphasized their determination to exercise rights protected by the Constitution.
The two-day government-mediated talks concluded without agreement on Wednesday, highlighting the divide over performance-based bonuses linked to earnings from Samsung's semiconductor business, an area currently experiencing a memory supercycle. The latest management proposal suggests maintaining the current excess profit incentive system, with the bonus pool calculated based on either 10 percent of operating profit or economic value added, known as EVA. Additionally, the company proposed a special compensation system to create a more flexible incentive structure.
The union, however, is pushing for fixed performance bonuses equating to 15 percent of the operating profit from the semiconductor division, alongside the removal of any payout cap. Despite further calls from company executives on Friday for the union to return to wage discussions, no new proposals sought by the union were offered.
Choi disclosed that approximately 41,000 unionized workers have indicated their intention to join the general strike, with the potential for this number to exceed 50,000. The South Korean government has expressed concerns about the strike's potential impact, warning of significant risks to economic growth. Analysts predict that a full-scale strike could result in losses to the South Korean economy, heavily reliant on exports, amounting to up to 100 trillion won (US$66.7 billion).
In the first quarter, Samsung posted a record 57 trillion won in operating profit, with expectations that annual operating profit could reach around 300 trillion won. South Korea's exports hit a record $219.9 billion in the first quarter of 2026, driven by robust global demand for AI data centers, with semiconductor exports playing a key role, increasing 139 percent from the previous year to $78.5 billion as AI-related server investments surged.