SEJONG, May 20 (AJP) -Samsung Electronics faces an unprecedented 18-day strike from Thursday after the union walked out of government-mediated marathon talks over revisions to the employee reward system at the tech giant whose market valuation has swelled to nearly $1 trillion amid the AI boom.
Management and the Korean tech giant’s largest union held three days of talks at a government complex in Sejong under the mediation of the National Labor Relations Commission (NLRC), seeking to avert a general strike involving some 50,000 workers, mostly from semiconductor production lines.
The planned 18-day walkout is feared to inflict billions of dollars in losses not only on the chipmaker but also on the broader South Korean economy, which heavily depends on chip exports.
Shares of the No. 1 stock fell 2.5 percent to 269,500 won ($178.7) following the news.
The final round of talks collapsed late Wednesday morning after management held off on signing a compromise proposal put forward by government arbitrators, despite the union's official endorsement.
In a statement to reporters, the union blamed management's indecisiveness for the breakdown. "The union agreed to the mediation proposal presented by the NLRC on Tuesday night," said Choi Seung-ho, chief of the Samsung labor union. "However, management repeatedly stated on Wednesday morning that a decision had not been made, delaying the process until the mediation was officially terminated."
Choi confirmed the strike would proceed as planned on Thursday but noted the union remains open to dialogue during the walkout.
Samsung Electronics immediately issued a fierce counter-statement, shifting the blame to the union’s "excessive demands" and defending its core business principles.
"The failure to reach an agreement at the final moment was because accepting the union's excessive demands would shake the basic principles of corporate management," Samsung said in its official statement. "In particular, even though the company accepted most of the bonus scale and details, the union refused to back down on its demand for socially unacceptable levels of compensation for deficit-making business divisions."
The world's largest memory chipmaker emphasized that giving in to such demands would directly violate its core principle of "rewarding where there is performance," warning of negative ripple effects across other industries.
NLRC Chairman Park Soo-keun confirmed that the labor side had made significant concessions, but the two parties ultimately failed to narrow differences on a few critical clauses, leading management to "reserve" its signature.
"The employer requested to hold off on signing, leaving the proposal unfulfilled," Park told reporters in Sejong. "However, because a resolution must eventually be reached, the commission stands ready to respond to any joint request for arbitration at any time, whether it be at night or over the weekend."
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