Samsung Electronics urges union to resume talks as strike threat looms

[SEOUL] Samsung Electronics on Thursday (May 14) proposed that its South Korean labour union resume pay talks, after government-mediated negotiations fell apart, a union leader said – citing a letter from the company.

South Korea’s Labour Commission also called on the two sides to hold another round of government-mediated talks on Saturday in a bid to avert a threatened lengthy strike.

Responding to the letter, union representative Choi Seung-ho said: “There is no reason to continue the dialogue without institutionalisation and transparency.”

He was referring to the union’s demand for an overhaul of Samsung’s bonus scheme.

Choi later posted a reply that he said was sent to management on Thursday.

In the response, the union pledged to sit down for talks if the company presented a detailed proposal that addressed its demand for a transparent and codified profit-sharing plan.

If no reply was received by 10 am on Friday, the union would go ahead with a planned strike, it said.

Grievance with bonus pay gap

One of the union’s grievances is with what it calls a massive gap in bonus pay with chipmaker SK Hynix.

The labour group has threatened an 18-day strike from May 21 if its demands are not met.

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Samsung Electronics said that while the government-mediated process had ended, it will “continue engaging in dialogue to ensure the 2026 wage negotiations are resolved smoothly”.

Finance Minister Koo Yun-cheol said on Thursday that a strike should be averted at all costs, adding that it would be a significant risk to South Korea’s economic growth, exports and markets.

The economy has become increasingly dependent on booming chip exports.

Semiconductors accounted for 37 per cent of the country’s exports in ​April, up from 20 per cent in the year-ago period, going by government data.

In a report, JPMorgan Chase said that the production impact of a strike could be higher than previously anticipated due to the union’s expectation of broader worker participation.

JPMorgan estimated the impact on Samsung’s operating profit at 21 trillion (S$17.9 billion) to 31 trillion won while sales opportunity losses could stand at about 4.5 trillion won.

Samsung started reducing chip production on Thursday ahead of a possible strike, newspaper MoneyToday reported, citing industry sources.

A spokesperson from the company declined to comment. REUTERS