Samsung union puts off 18-day strike after reaching tentative wage deal

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Samsung Electronics’ labor union said Wednesday it will hold off on launching a planned strike and instead put a tentative wage agreement reached with management to a vote, easing immediate concerns about operations at the world’s largest memory-chip producer.

In a televised briefing, union leader Choi Seung-ho said the union agreed not to go ahead with an 18-day strike that he had earlier said would start from Thursday. He said union members will vote on the tentative agreement between May 22 and May 27.

Choi said the union had apologized for “causing concerns due to our internal conflicts,” adding that “The agreement is the result of our all-out struggle spanning about six months.” He described the deal as the outcome of the union’s sustained negotiations and internal bargaining.

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

The announcement followed last-minute government-mediated talks between the two sides on how bonus payouts should be structured for employees, with the dispute tied to what the union described as conditions created by Samsung’s soaring profits. The agreement was reached after earlier negotiations failed to produce a breakthrough.

Government officials had warned they were prepared to invoke rarely used emergency powers to force a settlement at Samsung, given concerns that a strike would rattle global semiconductor supplies and affect South Korea’s trade-dependent economy. The union represents more than 70,000 workers.

Earlier Wednesday, the union and Samsung had exchanged blame after their previous round of negotiation ended without a deal. Choi accused management of refusing to accept a government-mediated proposal, though he did not disclose details of what was proposed. Management, in turn, accused the union of calling for compensation packages that would be excessive for workers in units that were described as loss-making.

Samsung and the labor dispute have drawn wider attention because Samsung and cross-town rival SK Hynix together produce about two-thirds of the world’s memory chips, which are seeing rising demand linked to artificial intelligence. Samsung said last month its operating profit for the January-March quarter jumped eightfold to a record 57.2 trillion won ($38 billion), underscoring what both sides have framed as the stakes of bonus and wage arrangements.

The labor union had pushed for a compensation structure under which Samsung would commit to spending 15% of its annual operating profit on employee bonuses and eliminate bonus caps that are currently set at 50% of annual salaries. Samsung said the union’s demands were excessive, citing the cyclical nature of the semiconductor business and suggesting that the proposed terms did not match industry swings.

Samsung and union leaders did not immediately confirm the specific terms of the tentative agreement. Yeo indicated that the company had agreed to union demands that would expand bonuses beyond Samsung’s lucrative memory division and into less profitable units, saying the company needed to invest in both its memory and foundry businesses and that production engineers work across those areas.

The dispute had also been shaped by government warnings about potential economic harm. Prime Minister Kim Min-seok, described as the No. 2 official after President Lee Jae Myung, said in a televised statement Sunday that the strike could cause up to 100 trillion won ($66 billion) in economic damage by disrupting Samsung’s complex semiconductor manufacturing processes.

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