Samsung Electronics is set to face one of the largest labor strikes in its history after negotiations between management and the company’s labor union over performance bonuses collapsed ahead of a planned 18-day walkout in South Korea.
The union said nearly 50,000 members, representing about two-thirds of Samsung’s semiconductor workforce, are expected to participate in the strike beginning Thursday and continuing through June 7.
The dispute centers on demands for changes to Samsung’s bonus structure, with workers calling for the removal of a cap limiting bonuses to 50 percent of annual salary and seeking a system that allocates 15 percent of the company’s annual operating profit to bonuses.
Samsung rejected the demands, describing them as excessive and arguing that rewarding loss-making divisions would undermine management principles.
Talks mediated by South Korea’s National Labor Relations Commission failed to produce an agreement despite a final mediation effort on Wednesday.
The commission said the labor side accepted the mediation proposal, while Samsung management withheld its decision.
Union leader Choi Seung-ho said the strike would proceed despite continued willingness to negotiate.
“I would like to apologise to the public for not being able to produce a good result despite making as many concessions as possible,” Choi said.
Samsung stated it would continue dialogue efforts until the last moment to avoid what it described as the “worst-case scenario.”
The disagreement particularly concerns bonuses for workers in deficit-making business divisions, including the foundry and system LSI operations.
Samsung maintained its position of “no bonus without performance.”
South Korean officials expressed concern over the potential economic impact of a prolonged strike at the country’s largest chipmaker.
The presidential Blue House urged both sides to continue negotiations, while the government considered invoking emergency mediation powers that could suspend the strike for 30 days.
Prime Minister Kim Min-seok warned that the dispute could result in up to 100 trillion won in direct and indirect losses and affect more than 1,700 subcontractors.
Although Samsung’s highly automated production systems may limit immediate disruption, analysts and officials warned that extended industrial action could affect global supplies of high bandwidth memory and server DRAM chips used in artificial intelligence infrastructure.