Samsung Electronics and its labor union nearly entered the company's largest-ever strike over a dispute regarding bonus payouts. Nearly 48,000 workers, representing 38% of the domestic workforce, threatened an 18-day walkout starting Thursday. The union demanded the abolition of a 50% annual salary bonus cap and the allocation of 15% of annual operating profit to a bonus pool, citing record profits from the AI boom and more competitive bonuses at rival SK Hynix, which had led to talent defections.
The potential strike threatened to disrupt global memory chip supplies and severely impact the South Korean economy, which relies on Samsung for nearly a quarter of its exports. Analysts warned of potential DRAM and NAND supply disruptions and a possible 0.5 percentage point reduction in national economic expansion, with some estimates suggesting up to 100 trillion won in economic damage. In response, the South Korean government considered an emergency arbitration order, while a court partially granted an injunction requiring essential staffing levels to be maintained at production facilities to prevent damage.
Following several rounds of government-mediated talks involving the labor minister, Samsung and the union reached a preliminary pay deal on Wednesday. While previous negotiations had stalled over the bonus cap and compensation for loss-making units, the tentative agreement has led the union to suspend the planned strike. Union members are now scheduled to vote on the deal from May 23 to May 28.