Samsung Electronics shares jumped on Monday as South Korean officials intensified efforts to prevent a looming 18-day strike that could involve more than 47,000 workers and disrupt the country’s semiconductor industry.
The rally in Samsung shares came after South Korean President Lee Jae Myung called for restraint from both labour and management ahead of a planned strike scheduled to begin on May 21.
In a post on X written in Korean, Lee said, “labour must be respected as much as business, and corporate management rights must be respected as much as labour rights.”
“Excess is not beneficial; extremes lead to reversal,” he added.
Samsung Electronics shares rose as much as 6.65 per cent during Monday trading before paring gains to around 3 per cent.
The comments from Lee came as Samsung management and the workers’ union prepared for a final round of negotiations on Monday aimed at averting the industrial action.
The union’s demands are focused on Samsung’s performance-based bonus system. It is seeking bonuses equivalent to 15 per cent of the company’s operating profit, the removal of bonus payout caps, and the introduction of a formalised bonus structure, among other measures.
Samsung management has reportedly offered to allocate 10 per cent of operating profit to bonuses alongside a one-time special compensation package, according to South Korean news agency Yonhap.
South Korean Prime Minister Kim Min-seok on Sunday warned that the strike could inflict severe economic damage and said the government was prepared to consider emergency intervention measures.
“The economic losses we will face will be beyond imagination,” Kim reportedly said, describing Monday’s talks as the final opportunity to avoid the strike.
He added that the government would explore “all possible response measures, including emergency adjustments,” if the strike threatens to cause “significant damage.”
Under South Korean law, the labour minister can invoke an “emergency adjustment” order to suspend industrial action for 30 days if a dispute is considered likely to harm the economy or disrupt daily life.
Kim estimated that direct losses from the strike could reach one trillion won ($664.7 million). He warned that losses could climb to as much as 100 trillion won if semiconductor production disruptions force Samsung to scrap wafers already in production.
However, Samsung’s workers’ union disputed the government’s assessment, arguing that previous production pauses had occurred during equipment inspections, maintenance and process adjustments.
The union also accused the government of failing to adequately review materials submitted in its defence and focusing solely on management’s claims.
According to government data, Samsung Electronics accounts for 22.8 per cent of South Korea’s exports and 26 per cent of the country’s total market capitalisation. South Korea’s presidential office also said Samsung’s revenue represents 12.5 per cent of the nation’s Gross Domestic Product.
Analysts have meanwhile raised concerns about concentration risks within South Korea’s economy and stock market, warning that reliance on a small group of major companies leaves the country vulnerable to market volatility and geopolitical shocks, including any slowdown in global data-centre spending.
South Korean Finance Minister Koo Yun Cheol last week also warned against any industrial action involving Samsung.
“Strikes must never happen under any circumstances,” Koo wrote in a post on X.
“Samsung Electronics is an important company that the world is watching,” he added. “Considering the current management situation and its impact on the national economy, both labour and management sides must continue to strive to achieve principled negotiations.”
Samsung chairman Lee Jae-yong on Saturday issued a rare public apology to customers worldwide for causing “worry and anxiety,” according to South Korean media reports.
The workers’ union said more than 47,000 employees could participate in the strike. It also claimed that a rally held on April 23 involving 40,000 workers resulted in a 58 per cent decline in foundry production and an 18 per cent drop in Samsung’s memory production that day.
The union estimated that an 18-day strike could cost Samsung about 30 trillion won, or approximately $20 billion.
Boluwatife Enome
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