SEOUL, March 31 (AJP) - Samsung Electronics claims it has put forward a compensation package more attractive than that of rival SK hynix, but its largest labor union is calling it a deception — and is pressing ahead with plans for a general strike in May.
“The company lied to us,” Kim Jae-won, head of policy planning at the National Samsung Electronics Union (NSEU), told AJP on Tuesday. “There is no other way to describe what happened at that table.”
Wage negotiations have collapsed, pushing South Korea’s largest tech firm toward what could become its most significant strike yet — at a time when chip prices are surging amid supply shortages, compounded by raw material and shipping disruptions tied to the widening conflict in the Middle East.
The Samsung Electronics Labor Union (SELU), which represents more than 70,000 employees — over half of Samsung Electronics’ workforce — suspended talks on Friday. The union accuses management of presenting a proposal to institutionalize bonuses, only to later deny that such an offer was ever made.
The union has warned it will proceed with a general strike in May unless executives issue a formal apology for what it calls a “deceptive approach to bargaining” and replace the current negotiation team.
At the heart of the dispute is what transpired in the latest round of talks.
According to Kim, management offered two options: a one-time bonus or the permanent institutionalization of the Overachievement Performance Incentive (OPI) system.
“They told us they would persuade top management based on our choice,” Kim said. “We chose institutionalization. But later we were told it had been rejected — and now they claim it was never proposed at all.”
Kim suggested either the negotiating team acted without senior approval or top management reversed course afterward.
“Either way, they stabbed us in the back. This is something we cannot accept,” he said.
Union leader Choi Seung-ho said the alternative proposal was equally unacceptable.
“The company tried to push a one-time payout using treasury stock, which we rejected,” Choi said. “We are demanding a transparent, cash-based system. Management appears reluctant because it wants to preserve its corporate governance structure.”
Samsung acknowledged the breakdown in talks but offered a different interpretation.
“We sought a method to allocate additional resources more clearly to high-performing business units, while the union insisted on maintaining a uniform distribution approach,” a company official said.
On the key issue of the OPI cap — currently set at 50 percent of annual salary — the company said it had not ruled out adjustments.
“It’s not that we refused to lift the cap,” the official said. “Our proposal included similar conditions, but our focus was on how to distribute additional resources, whereas the union prioritized securing a fixed share of operating profit.”
What is clear is that the standoff is deepening.
Samsung’s attempt to offer a one-time payout — reportedly exceeding SK hynix’s package — while preserving the existing compensation structure appears to have backfired.
The union has escalated its demands, calling for 15 percent of operating profit to be allocated as a bonus pool, above the 10 percent benchmark at domestic peers. It also proposes a “7-to-3” distribution split — 70 percent at the division level and 30 percent at the business unit level — aimed at narrowing pay gaps across divisions.
“The company only justified our actions,” Kim said. “Members are angrier than ever and uniting faster. They’re spending money but still getting blamed because of their own actions.”
As of Tuesday, SELU membership stood at 70,375, accounting for 54.5 percent of Samsung Electronics’ workforce. Unionization in the core chipmaking Device Solutions (DS) division has climbed to 72.2 percent.
The union plans a mass rally of around 30,000 workers at the Pyeongtaek semiconductor complex on April 23, with 22,000 already committed to attend. A full-scale strike will proceed in May unless management changes course.
Samsung said it will continue efforts to resolve the dispute and avoid a strike that could surpass the scale of its first walkout two years ago.
“We don’t yet know how it will impact operations, but the best-case scenario is to resolve this before a strike,” an official said, requesting anonymity.
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