Samsung management and labor unions resumed talks earlier in the day in a last-ditch effort to avert a strike. The union at the world’s leading memory chip maker announced it would begin a strike on Thursday after talks over bonuses failed, raising concerns about potential disruptions to semiconductor production.
But late Wednesday, the union said the planned strike “will be postponed until further notice,” adding that a provisional wage agreement would be put to a vote. All members will participate in the vote, which will be held between May 23 and May 28, the union said.
Labor Minister Kim Young-hoon said the company’s management and unions had reached a provisional agreement through voluntary negotiations and he thanked both sides for “firmly holding on to the thread of dialogue until the end.”
Samsung management apologized for “the anxiety caused” by the dispute, and pledged to “build more mature and constructive labor-management relations so that such a situation does not happen again.”
The strike is expected to be larger than the one in 2024 involving about 6,000 workers, as workers are angry about how the company is distributing huge profits from advances in artificial intelligence. Samsung reported a roughly 750% jump in first-quarter operating profit year-on-year, while its market capitalization topped $1 trillion for the first time in May.
Workers Demand Removal of Bonus Cap
The labor union is demanding the removal of the bonus cap set at 50% of annual salary and 15% of operating profit earmarked for bonuses. According to union lawyers, about 50,500 workers are expected to walk off production lines for 18 days starting Thursday after talks with management failed.
In response, Samsung management said initial talks had failed because “giving in to the union’s excessive demands could undermine the company’s fundamental management principles.” The dispute has raised concerns in South Korea, where semiconductors account for about 35% of exports and are the backbone of the economy.
The president's office expressed "deep disappointment" over the failure of previous talks and urged both sides to continue talks given the economic impact of the strike.
Experts say even if Samsung's operations are partially halted, it could have a negative impact on the economy, although the union says production disruptions have occurred before due to equipment maintenance and inspection.
Samsung's union argues that workers at another South Korean chipmaker, SK hynix, received bonuses last year more than three times those at Samsung. Union lawyers say the company faces a loss of talent to competitors and an increase in union members due to what workers describe as a "lack of transparency" in the bonus system.
However, Tom Hsu, an analyst at Taipei-based research firm TrendForce, said the impact of a strike if it goes ahead would likely be limited.
"Due to the high level of automation at front-end facilities, TrendForce expects Samsung's DRAM and NAND Flash production to remain at full capacity," he told AFP.
