Yonhap News Agency reported that Samsung Electronics and its union failed to reach a last-minute wage agreement, increasing the risk of a strike that could disrupt the operations of the world's largest memory chip maker. Previously, two days of marathon negotiations mediated by South Korea's labor department collapsed. The union and management had serious differences over performance bonuses linked to the sharp increase in artificial intelligence (AI) profits. The union requires Samsung to cancel the current bonus cap, use 15% of operating profits for employee bonuses, and write relevant provisions into the labor contract.
Yonhap News Agency reported that Samsung proposed to use 10% of operating profits for bonuses and provide a one-time special compensation package that is higher than industry standards. Company executives said the union's demands were unsustainable in the long term, according to the report.
South Korea's National Labor Relations Commission (NLRC) said in a statement that it stands ready to provide further post-mediation support if both parties jointly request it.
The failure of the talks highlights growing tensions in South Korea's tech industry, where employees are fighting for a bigger share of profits from the AI infrastructure boom. Union leaders pointed out that rival SK Hynix agreed last year to put 10% of annual operating profits into a performance bonus pool.
The union has threatened an 18-day strike starting on May 21, raising concerns about potential disruption to Samsung's semiconductor business. Samsung is currently competing fiercely with SK Hynix and Micron Technology in the memory chip market. If the labor dispute continues, it could further complicate Samsung's efforts to accelerate the development of next-generation semiconductors.
On April 23, Samsung Electronics employees held placards during a pre-strike rally outside the Samsung Electronics semiconductor factory in Pyeongtaek, South Korea.
The dispute comes as South Korea debates the distribution of profits from the AI boom.
On Wednesday, the Suwon District Court will hold a second hearing on Samsung's application for an injunction to limit the union strike. The court is expected to decide whether to approve the ban by May 20 at the latest. The application aims to ban the occupation of key facilities and require personnel in key security positions to stay on site to prevent damage to equipment, which may change the scale of the strike scheduled to begin on May 21.