Samsung Electronics Union to Strike Despite Management's Dialogue Offer
Samsung Electronics Co.'s largest labor union announced Friday it will proceed with a major strike planned for next week, despite the company's latest proposal to resume talks without preconditions. The decision comes as the two sides remain sharply divided over performance-based bonuses tied to the company's artificial intelligence semiconductor business.
The union's announcement followed the company's official proposal sent earlier in the day, seen as management's latest effort to avert an 18-day strike beginning next Thursday that could disrupt production at the world's largest memory chipmaker. The union reaffirmed its position that it has no intention of engaging in further dialogue unless its key demands on performance-based bonuses are addressed before another round of government-mediated talks proposed for Saturday.
"We are willing to hold discussions after June 7," Choi Seung-ho, head of Samsung Electronics' largest labor union, said, referring to the day after the planned strike is scheduled to end. "We intend to exercise the rights guaranteed under the Constitution."
Two days of government-led mediation talks ended without an agreement Wednesday, as labor and management remained sharply divided over performance-based bonuses tied to earnings from the company's AI-related semiconductor business amid the ongoing memory supercycle.
According to the latest official document sent to the union, management proposed maintaining the current excess profit incentive system while allowing the bonus pool to be calculated based on either 10 percent of operating profit or economic value added (EVA). The company also proposed introducing a special compensation system, saying it would help create a more flexible incentive structure.
In contrast, the union has demanded fixed performance bonuses equivalent to 15 percent of the operating profit generated by the company's semiconductor division.
Court Ruling and Escalation
Earlier this week, a court partially accepted Samsung Electronics' request for an injunction to block the strike. The Suwon District Court ruled that staffing to prevent potential damage to safety-related and other facilities and its products must be maintained at usual levels, just three days ahead of the union's planned action.
The strike threat has raised concerns over potential economic fallout. Industry observers estimated that a full-scale strike could have resulted in losses as high as 100 trillion won (US$66.7 billion). The latest development also comes amid broader labor unrest at major South Korean tech firms over performance-based pay and profit-sharing schemes.
The union's decision to proceed with the strike underscores the deepening rift between labor and management at Samsung Electronics, a key driver of South Korea's export-driven economy. The company has yet to respond publicly to the union's latest statement.