Labor minister steps in as Samsung bonus talks stall hours ahead of strike

This article is by Lee Jae-lim and read by an artificial voice. After marathon talks between Samsung Electronics' management and labor fell apart Wednesday, a planned 18-day strike due to start Thursday moved closer to reality. The country's labor minister directly joined mediation efforts for the first time on Wednesday, but no agreement had been reached as of press time. As talks continue, all eyes are on whether the government will invoke its emergency arbitration powers, a last resort that could prevent the strike from snowballing into substantial economic damage, should negotiations fail. That decision remains uncertain. The government is concerned that wielding this rarely used power, which can ban all collective action for 30 days, could set a negative precedent. During this period, a government body would conduct mediation. "The government will provide maximum support, unconstrained by formalities, to ensure the matter is resolved through autonomous labor-management negotiations until the very last moment," a Ministry of Employment and Labor spokesperson said, drawing a clear line on the question of emergency arbitration, adding that it was "too early to speak to that specifically." Any disruption to semiconductor production could ripple far beyond Samsung, affecting the country's exports as well as major clients such as Nvidia, Apple and Google. At the heart of the dispute is how bonuses are distributed across Samsung's three different semiconductor units, which cover memory, chip manufacturing and chip design. Of the three, only the memory division is currently profitable, riding the AI-driven surge in demand that has Big Tech lining up to secure supply. The bone of contention is whether a common pool of special bonuses — shared across the entire semiconductor division — should be large enough to give employees in loss-making units payouts comparable to those in the profitable memory unit. The union agreed to the ratio proposed by the government mediator, but management rejected it, arguing that it violates the company's core principle of tying rewards to performance. The production of high bandwidth memory (HBM), which is a key component powering global AI infrastructure, is of the greatest concern should the strike proceed. Choi Seung-ho, head of the Samsung Electronics chapter of the Samsung Group United Union, confirmed the walkout was going ahead as he left the post-mediation session at the National Labor Relations Commission (NLRC) office in Sejong. "The union will proceed as planned and lawfully launch a general strike," Choi said. "We wish to make clear that even during the strike, we will not cease our efforts to reach a settlement." He emphasized that the union had agreed to the mediator's proposal — it was management that walked away. Samsung, for its part, said the breakdown is deeply regrettable, but stood firm. The union's demand to set aside a significant portion of bonuses for loss-making divisions "directly contradicts" its performance-based management principle, the company said. "The company has determined that abandoning this principle would have an adverse impact not only on Samsung Electronics, but on other companies and industries as well," it added. "Nevertheless, Samsung Electronics will continue its efforts to resolve this matter until the very end, whether through additional mediation or direct dialogue with the union." Industry observers are estimating losses resulting from the walkout, scheduled to run through June 7, to reach up to 100 trillion won ($66.3 billion) as semiconductor production grinds to a halt. The ripple effects would extend beyond Samsung itself, affecting the broader ecosystem of parts, materials and equipment suppliers that depend on it, and weighing on Korean exports overall. A court has already granted management an injunction limiting the scope of industrial action, requiring workers to maintain normal staffing levels at safety facilities and in processes that ...