Choi Seung-ho, head of Samsung Electronics’ largest labor union, speaks to reporters Wednesday after a hearing on an injunction against a labor strike filed by Samsung at Suwon District Court. Photo by Yonhap
Samsung Electronics Co. and its labor union failed to reach a wage agreement Wednesday, raising concerns over a major strike later this month that could disrupt operations at the world’s largest memory chipmaker.
The breakdown came after two days of government-led mediation talks that had been viewed as a last-ditch effort to avert the strike scheduled for May 21.
Union and management have remained sharply divided over performance-based bonuses tied to the company’s earnings related to artificial intelligence (AI).
The union has demanded performance bonuses equivalent to 15 percent of operating profit, along with the removal of the payout cap and the formal institutionalization of the bonus system.
The management, meanwhile, proposed allocating 10 percent of operating profit to bonuses and offering a one-time special compensation package that it said exceeds industry standards.
“Because the differences between the labor union and management did not narrow, we requested mediation and waited for nearly 12 hours, but the proposal only worsened,” Choi Seung-ho, head of Samsung Electronics’ largest labor union, told reporters after the meeting at the National Labor Relations Commission office in the administrative city of Sejong.
Choi said some 41,000 unionized workers have expressed their intention to take part in the general strike, adding that the number could rise to more than 50,000.
“It is meaningless to wait any longer,” Choi said. “We do not plan to hold an illegal strike. We will proceed in a legitimate way.”
Choi added that the union now will focus on responding to Samsung’s request for an injunction restricting the union’s planned strike.
Later Wednesday, the Suwon District Court concluded a closed-door second hearing attended by about 30 people, including lawyers and officials from both sides.
During the hearing, the union argued that the strike would be carried out lawfully within a limited period and that it had no intention of illegally occupying company facilities, making an injunction unnecessary.
The court is expected to decide by May 20 whether to grant the injunction.
Following the breakdown in talks, Samsung Electronics expressed regret over the suspension of the mediation process, while pledging to continue efforts to engage in dialogue.
“The post-mediation process, which the government worked hard to arrange, unfortunately collapsed after the union declared negotiations broken down,” the company said in a press release. It, however, vowed to continue making sincere efforts until the very end to prevent the worst-case outcome from materializing.
The labor dispute at Samsung Electronics, the world’s largest memory chip maker and South Korea’s most valuable company, has raised concerns that a walkout could disrupt production and upend the semiconductor supply chain, as well as hurt the broader economy overall.
Observers say that if a full-scale strike takes place, losses to the South Korean economy, which is heavily dependent on exports, could exceed 40 trillion won (US$26.8 billion).
South Korea’s exports reached a record $219.9 billion in the first quarter of 2026, driven by strong global demand for AI data centers. Semiconductor exports were a major contributor, surging 139 percent from a year earlier to $78.5 billion as investment in AI-related servers accelerated.
Some observers have speculated that the government could invoke emergency arbitration powers to prevent further escalation.
Under South Korea’s labor laws, the labor minister may order emergency arbitration when industrial action is deemed likely to endanger public welfare or seriously harm the national economy.
If invoked, all strike actions would be prohibited for 30 days while mediation and arbitration procedures are conducted by the commission. Emergency arbitration powers have been exercised only four times in South Korea’s history.
A commission official declined to comment on the possibility, saying, “It is not something we are reviewing.”
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