The labor union of Samsung Electronics, the world's largest memory chip manufacturer, announced the suspension of its planned 18-day strike "until further notice" after negotiations with management resumed. South Korea's Minister of Labor, Kim Young-hoon, participated in the talks, leading to an immediate 6.5% surge in Samsung's stock price.
Samsung Electronics’ labor union, representing the world's largest memory chip producer, declared it would suspend its planned strike in South Korea "until further notice" following the resumption of negotiations with management, which included South Korea's Minister of Labor, Kim Young-hoon.
Previously, the union announced plans to strike starting 21 May after talks over bonuses failed, raising concerns about potential impacts on semiconductor production and the global chip supply chain. However, the union recently stated that the preliminary wage agreement will be put to a vote by all members between 23 and 28 May.
South Korea’s Minister of Labor revealed that both sides voluntarily reached an agreement through negotiations and expressed gratitude that communication channels were maintained until the very last moment.
Samsung issued a statement apologizing for the concerns caused and pledged to foster a more constructive and mature relationship between management and labor to prevent similar situations from occurring again.
This protest is being closely watched as it could be larger than the 2024 strike, which involved about 6,000 employees. The union stated that nearly 50,000 members are prepared to strike for 18 days due to dissatisfaction with the company’s bonus system.
The union demands the removal of the bonus cap set at no more than 50% of the annual salary and requests that the company allocate 15% of operating profits as employee bonuses. Samsung has benefited from the artificial intelligence (AI) boom, with first-quarter operating profits rising approximately 750% year-on-year and its market value surpassing $1 trillion for the first time in May.
The union also compared that employees at rival company SK hynix receive bonuses more than three times higher than Samsung workers and stated that the lack of transparency in the bonus system is causing many employees to resign and join the union.
Despite economic concerns since the semiconductor industry accounts for about 35% of South Korea’s export value, analysts believe that if a strike occurs, the impact may be limited to certain business units due to the high level of automation at Samsung’s main chip manufacturing plants.
The stock market responded positively, with Samsung Electronics shares rising as much as 6.5% during Thursday morning trading after investors eased worries about the risks posed by a major strike.