Samsung union puts off strike after last-minute wage deal with management

Samsung union delays strike after government-brokered wage agreement

Samsung Electronics’ labor union said Wednesday it would postpone a planned strike after a last-minute wage deal was reached with management in negotiations mediated by the South Korean government.

Union leader Choi Seung-ho said the union agreed not to proceed with an 18-day strike that he earlier said would begin Thursday. He said union members will vote on the tentative agreement from May 22-27, after the deal was presented during a televised briefing.

Choi said the union wanted to apologize to the public for concerns caused by internal conflict within the labor group. He also described the negotiations as the result of “all-out struggle spanning about six months,” according to his remarks during the briefing.

Choi’s negotiating partner at Samsung, senior company official Yeo Myounggoo, said the company hoped the agreement would serve as a starting point for more stable relations with the union. Yeo told reporters that Samsung would “faithfully implement the terms of this agreement and will make its utmost efforts to promote labor–management cooperation.”

The announcement came after a round of talks that had ended without a breakthrough earlier Wednesday, with both sides trading blame. The union accused management of refusing to accept a government-mediated proposal, while management said the union’s demands involved compensation packages that were excessive for units that are not making profits. Samsung and the union did not immediately provide details of the tentative agreement.

Government officials had previously warned that they could invoke rarely used emergency powers to force a settlement at Samsung, after the union’s planned walkout raised fears of disruption to global semiconductor supplies. The union represents more than 70,000 workers, and officials said the potential impact threatened South Korea’s trade-dependent economy.

Samsung and its cross-town rival SK Hynix together produce about two-thirds of the world’s memory chips, which have seen surging demand linked to artificial intelligence. Samsung said last month that its operating profit for the January-March quarter increased eightfold to a record 57.2 trillion won, reflecting the broader AI-driven boom in memory prices.

The wage dispute centered on bonus and compensation structure, including what percentage of operating profit should be spent on employee bonuses. The union demanded a plan under which Samsung would commit to spending 15% of its annual operating profit on employee bonuses and eliminate bonus caps set at 50% of annual salaries, while Samsung said the demands were excessive because the semiconductor business is highly cyclical.

In comments earlier in the week, Prime Minister Kim Min-seok, South Korea’s No. 2 official after President Lee Jae Myung, said in a televised statement Sunday that the strike could cause up to 100 trillion won in economic damage by disrupting Samsung’s complex semiconductor manufacturing processes.

As the dispute played out, a local court on Monday partially granted Samsung’s request for an injunction against the planned strike. The Suwon District Court ruled the union had to maintain certain staffing levels to prevent damage to facilities and materials and ensure safe operations, and it also barred unionists from occupying key facilities and offices.