Samsung workers prepare historic strike after wage talks collapse

07:02

By: Dakir Madiha

Samsung workers prepare historic strike after wage talks collapse

More than 47,000 employees at Samsung Electronics are preparing to launch a large scale strike on Thursday after final wage negotiations with management failed, raising concerns over disruptions to the global semiconductor supply chain. The planned walkout could become the largest labor strike in the company’s history and comes at a sensitive moment for the memory chip industry, where demand from artificial intelligence infrastructure, smartphones, and personal computers remains strong.

Shares of Samsung Electronics fell about 3% following reports that negotiations had broken down, as investors assessed the potential impact on chip production. The dispute centers on Samsung’s performance bonus structure. Union representatives are demanding that 15% of the company’s operating profit be allocated to employee bonuses, the removal of the current cap limiting bonuses to 50% of base salary, and the establishment of a permanent and transparent compensation framework. Workers argue that Samsung’s payouts lag behind those offered by rival chipmaker SK Hynix.

Samsung proposed a one time payment equivalent to roughly 13% of operating profit for 2026 but declined to commit to structural changes in the compensation system. Union officials rejected the proposal and accused the company of attempting to delay industrial action without offering meaningful concessions. The strike is scheduled to last 18 days, from May 21 to June 7, unless negotiations resume before the deadline.

The labor dispute has intensified concerns about the global semiconductor market. South Korean Prime Minister Kim Min-seok warned that even a single day of disruption at Samsung semiconductor facilities could cause direct economic losses of up to 1 trillion won, or about $665 million. Some analysts estimate that a prolonged shutdown could result in losses approaching 30 trillion won, equivalent to nearly $20 billion, if production delays spread across international supply chains.

A South Korean court issued a partial injunction limiting the scope of the strike. The ruling requires unionized employees to maintain safety operations and avoid interrupting semiconductor materials already in production. The court also prohibited workers from occupying company premises or obstructing non striking employees. Despite the order, uncertainty remains over how much the restrictions will reduce the strike’s impact on manufacturing activity.

South Korean President Lee Jae Myung urged both management and labor representatives to respect workers’ rights while protecting economic stability. Government officials also signaled that emergency arbitration powers could be used if the dispute begins to threaten the broader national economy. Union spokesperson Choi Seung-ho said the organization remains open to a reasonable proposal from Samsung but confirmed that no additional talks are currently planned before the strike begins.