Seoul: Samsung Electronics and its labour union returned to the negotiating table on Tuesday as South Korean authorities stepped up efforts to prevent a major strike that could disrupt global chip supplies and affect the country’s economy.
The fresh round of talks comes after weeks of rising tensions between the company and workers over salaries, bonuses and profit sharing. The union, which represents tens of thousands of Samsung employees, has warned that workers could launch an 18 day strike later this week if no agreement is reached.
The planned industrial action is expected to involve nearly 45,000 employees, making it one of the biggest labour disputes in Samsung’s history. Workers say they are frustrated because the company has seen massive profits from the growing demand for artificial intelligence chips, while employee benefits and bonuses have not increased at the same pace.
Samsung has become one of the world’s most important semiconductor manufacturers, supplying chips to major global technology companies including Nvidia, Apple, Amazon and Alphabet. Industry experts say any prolonged disruption in production could affect global electronics and AI markets.
The South Korean government has expressed serious concern about the possibility of a strike. Prime Minister Kim Min Seok recently warned that authorities may use emergency mediation powers if negotiations fail. Such a move would temporarily block strike action for up to 30 days while official mediators continue discussions between the two sides.
The government rarely uses such powers, but officials believe the situation could have wider economic consequences because Samsung plays a major role in South Korea’s exports and technology sector.
At the centre of the dispute is the union’s demand for a larger share of company profits. Workers are asking Samsung to remove the current limit on annual bonuses, which is capped at 50 percent of salary. The union also wants 15 percent of the company’s yearly operating profit to be shared with employees through a formal bonus system.
Samsung management has proposed a different plan. The company has reportedly offered to allocate around 9 to 10 percent of operating profit for bonuses if profits cross a certain level this year. However, management wants to keep the existing bonus cap in place.
Union leaders argue that Samsung employees deserve better compensation because the company is earning huge profits from the global AI boom. They also point to rival chipmaker SK Hynix, which recently improved its bonus structure and offered higher payouts to workers.
According to local reports, some progress was made during the latest government mediated talks, although major differences still remain. Labour officials said both sides appeared willing to continue discussions in an effort to avoid a complete breakdown in negotiations.
A Seoul court has also stepped into the dispute by ruling that minimum staffing levels must be maintained at certain Samsung production facilities even if workers go on strike. The decision means some employees would still need to carry out safety and maintenance duties to prevent damage to equipment and protect product quality.
Analysts say the court ruling could reduce the risk of a total shutdown at Samsung factories, but they warn that even partial disruptions could lead to major financial losses. Some estimates suggest the company could lose billions of dollars if production is interrupted for an extended period.
The labour dispute comes at a sensitive time for Samsung. The company recently reported a sharp rise in semiconductor profits due to strong demand for AI related technology. Investors and global technology firms are closely watching the negotiations, hoping both sides can reach a settlement before the strike deadline arrives.