By Kwanwoo Jun
Samsung Electronics' management and union leaders resumed wage talks on Monday in a last-minute effort to avert a potentially disruptive strike at the world's largest memory-chip maker.
Both sides were under pressure to reach a deal after South Korea's government warned that it could invoke emergency-mediation powers to restrict the industrial action and force a settlement if negotiations fail.
At stake is how to distribute huge Samsung profits on strong chip demand amid the artificial intelligence boom. The company's net and operating profits surged nearly sixfold and more than eightfold, respectively, from a year earlier to record highs in the first quarter, with earnings expected to accelerate further this year.
Negotiators failed to reach an agreement in previous talks over how Samsung's booming profits should be shared. The union demanded that the company allocate 15% of its annual operating profit to employee bonuses, but management rejected the call because it would exceed the company's bonus cap, currently set at 50% of annual salary. Union leaders also called for the cap to be removed, a demand company executives likewise turned down.
Unionized Samsung workers plan to strike from May 21 to June 7. The union said it would proceed with the walkout if no settlement is reached in government-mediated negotiations that resumed at the National Labor Relations Commission in Sejong, central South Korea, early Monday morning.
Both sides returned to the negotiating table, a day after South Korean Prime Minister Kim Min-seok warned his government would pursue all options available to avoid a strike that could wreak havoc on the economy.
Samsung accounts for 22.8% of South Korea's total exports and 26% of the local stock market, Kim noted.
"If a situation arises where massive damage to the national economy is feared, the government will have no choice but to devise all possible response measures, including emergency mediation, to protect the national economy," the prime minister said at a news conference on Sunday.
Kim noted that a single day of suspended operations at the Samsung chip assembly lines could result in losses of up to 1 trillion won, equivalent to $667.6 million.
He added that there were concerns that the economic damage could balloon to as much as 100 trillion won if wafers had to be discarded because of the strike.
On Saturday, Samsung Chairman Lee Jae-yong apologized for the labor unrest, saying it was causing anxiety and undermining trust among global customers. The Samsung chief called on all Samsung employees to "wisely join forces and move forward" to resolve the dispute.
"Unlike many other industries, the semiconductor industry is highly capital-intensive and requires processes to run 24 hours a day without interruption, so strikes must never occur," Samsung said in a separate statement.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
May 17, 2026 21:15 ET (01:15 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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