Key Takeaways
Samsung Electronics’ largest labor union will enter a two-day mediation with management on May 11 and 12, as the government steps in to avert a full-scale strike at the technology giant.
"If we do not see a satisfactory outcome, we will not hesitate to go on a full-scale strike," union chief Choi Seung-ho said in a statement, reaffirming a planned May 21 walkout.
The dispute centers on wages and performance-based bonuses, with an earlier round of mediation in March failing to produce an agreement. The National Labor Relations Commission, a government body, is facilitating the upcoming talks after both sides agreed to the post-mediation process. Shares of Samsung Electronics (005930.KS) rose 2.6 percent in after-hours trading in Seoul on the news.
The move comes amid growing concern from government officials about the potential economic fallout from a prolonged strike at one of the world’s largest chipmakers. Labor Minister Kim Young-hoon on Thursday urged both sides to engage in "sincere dialogue," while President Lee Jae Myung has warned against "excessive or unfair demands" that could harm the broader economy.
Labor authorities have actively intervened to bring the two parties back to the table. Kim Do-hyung, head of the Gyeonggi Provincial Employment and Labor Office, met with the union leader on Friday to encourage dialogue, according to the Ministry of Employment and Labor.
This is not the first time the two sides have required post-mediation. In July 2024, the union staged its first-ever strike, and the Central Labor Relations Commission initiated a similar process. While that effort did not lead to an immediate resolution, labor and management eventually reached a wage agreement on their own.
The union's threat of an 18-day strike beginning May 21 poses a significant risk to global technology supply chains, which rely on Samsung's output of memory chips and other critical components. A successful mediation would remove significant market uncertainty that has been weighing on the company. Investors will watch the outcome of the talks next week as a key indicator for the company's operational stability.
This article is for informational purposes only and does not constitute investment advice.
