Samsung Electronics (OTC:SSNLF) faces a potential strike by its South Korean labor union next week, despite the company offering to restart unconditional wage negotiations. The Korean chipmaker’s shares plunged nearly 9% in Seoul on Friday.
The union has expressed its willingness to engage in new discussions post June 7, but remains firm on its 18-day strike plan starting May 21, potentially disrupting production at the world’s largest memory chipmaker, reported Yonhap News.
The union also warned that over 50,000 workers could walk off the job next week.
According to the report, Samsung proposed keeping its current excess profit incentive system while offering a more flexible bonus structure tied to either 10% of operating profit or economic value added (EVA), along with a new special compensation system. The union, meanwhile, is demanding fixed bonuses equal to 15% of the semiconductor division's operating profit and the removal of payout caps.
Urging the union to recommence talks, Samsung executives have apologized for the discord caused by the labor dispute and committed to an open approach in future negotiations. A meeting between the company’s executives and the union leader at the Pyeongtaek campus is in the pipeline.
The South Korean Labor Commission has scheduled another round of government-mediated talks on Saturday to avert the strike. The union, however, will only participate if the company presents a detailed proposal addressing the union’s demands by Friday.
Samsung Warns Against Complacency
Samsung Electronics Vice Chairman and CEO Jun Young-hyun urged executives to remain alert amid a potential labor strike, warning against complacency despite the ongoing chip market boom, reported Yonhap News. He described the current upcycle as the company's "last golden opportunity" to rebuild its core competitiveness. “The time is not for complacency,” he said.
Earlier this month, Samsung Electronics reached a $1 trillion market capitalization, joining the elite club of companies like Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM) amid a surge in global demand for artificial intelligence.
Samsung’s robust first-quarter results, released late April, were driven by soaring demand for AI memory chips and tight global supply. Revenue rose about 70% year over year to 133.9 trillion won ($89.96 billion), while operating profit jumped more than 750% to a record 57.2 trillion won, beating analyst estimates and surpassing the company's total profit for all of 2025.
However, the looming strike threatens to disrupt this momentum. Analysts told Reuters that the impending strike has raised concerns about the chip giant’s ability to fulfill its commitments to customers, thereby affecting its market position. Meanwhile, the South Korean government warned that a strike at Samsung must be avoided, citing concerns that it could negatively impact the nation’s economic growth.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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