Nearly 50,000 workers at Samsung Electronics, representing 38% of the company's workforce, are expected to go on an 18-day strike starting Thursday. The majority of participants are from the chip production division—the core business of South Korea's largest electronics firm.
The strike follows failed government-mediated negotiations on Wednesday. Union leader Choi Seung-ho said the union accepted the final proposal from government mediators, but management did not concede on a final sticking point. Choi apologized to the public for not achieving a better outcome and pledged to continue seeking an agreement even during the strike.
The root cause of the dispute is disagreement over bonus policy. The union demands the company scrap the current bonus cap (50% of annual salary) and replace it with a bonus pool equivalent to 15% of annual operating profit. They also point out that rivals like SK Hynix offer higher bonuses. Samsung insists the union's demands are 'unacceptable' as they would undermine the company's basic management principles.
Strikes at Samsung were rare until recently. In June 2024, the company faced its first industrial action when some workers staged a one-day protest. Then, in July 2024, thousands of workers went on a three-day strike that extended into August. This strike is the largest in the company's history.
Samsung is the world's largest memory chip maker, contributing revenue equivalent to 12.5% of South Korea's GDP. The strike threatens to disrupt semiconductor production, a critical component for laptops, computers, and data centers. South Korea's central bank estimates a full-scale strike could reduce economic growth by 0.5 percentage points this year, with damages of around 30 trillion won ($20 billion).
The government has the authority to issue an emergency arbitration order, which can block strikes for 30 days if it determines the strike causes 'significant harm to the national economy.' This measure was last used in 2005 for a Korean Air pilots' strike. However, Labor Ministry spokesman Hong Kyung-ui said there is still time for dialogue and that activating this measure is not yet necessary.
Analysts suggest the impact on supply chains could be limited if the strike is short-lived, but the bigger effect may be on market sentiment and the pricing structure of the memory industry.
