Samsung Electronics and its largest labour union failed to reach a pay agreement after marathon negotiations, raising the prospect of a major strike that South Korea feared could damage its economy and disrupt global chip supplies.
The breakdown in talks prompted Prime Minister Kim Min-seok to convene an emergency meeting with senior ministers on Wednesday, as officials sought to prevent industrial action at the world’s biggest memory chipmaker.
A statement from the prime minister’s office said Mr Kim had ordered close monitoring of the dispute “considering the gravity of the impact on the national economy”.
He also urged “proactive support to ensure dialogue between the union and management can continue so this doesn’t lead to a strike under any circumstances”.
The union, which represents more than 90,000 Samsung workers, had threatened an 18-day strike from 21 May if its demands over wages and bonuses were not met.
Union representative Choi Seung-ho said Samsung had offered only a “one-off performance payment” for 2026 while rejecting calls to overhaul its bonus system.
The union wanted Samsung to remove a cap limiting bonus payments to 50% of annual base salary and allocate 15% of operating profits towards employee bonuses.
Mr Choi said there were no immediate plans to resume negotiations before the planned strike date, although the union would consider “a proper proposal” from management.
Samsung said it regretted the collapse of talks and pledged to continue “sincere dialogue” with the union to avoid what it described as a worst-case scenario.
The National Labor Relations Commission, which mediated the negotiations, said discussions ended because of “the wide gap between the two sides’ positions and the union’s request to suspend the talks”.
The dispute intensified concerns over the impact on South Korea’s technology sector, particularly as Samsung remained one of the world’s leading suppliers of memory chips and artificial intelligence semiconductors.
Shares in Samsung initially fell sharply before recovering later in the day, while rival SK Hynix rose strongly amid expectations it could benefit from Samsung’s labour troubles.
Speculation also grew that the South Korean government could invoke emergency arbitration powers, a rarely used measure that would temporarily ban industrial action while mediation continued.
Labour Minister Kim Young-hoon, however, said the dispute should be resolved through continued negotiations rather than state intervention.
The labour tensions followed growing frustration among Samsung employees after rival SK Hynix agreed to compensation reforms last year, including the removal of caps on bonus payments.
Samsung recently became only the second Asian company after TSMC to surpass a market valuation of $1tn, driven largely by surging global demand for artificial intelligence chips.
Erizia Rubyjeana
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