Samsung's 47,000 workers are on the verge of striking, South Korea's president urges a labor-management agreement.

Samsung's 47,000 workers are on the verge of striking, South Korea's president urges a labor-management agreement.

Samsung Electronics is facing a crisis of mass strikes that could severely impact the South Korean economy. Over 47,000 workers plan to launch an 18-day strike starting May 21, and high-level government officials have issued frequent statements urging both labor and management to reach an agreement before the deadline.

South Korean President Lee Jae-myung posted on the X platform on Monday, "Labor should be respected just like enterprises, and enterprise management rights should be respected just like labor rights," warning that "going to extremes will only lead to reversal."

Meanwhile, according to CCTV News, the Suwon District Court in South Korea approved part of Samsung Electronics' injunction request on May 18, ordering the union to ensure that the strike "does not affect output" and "does not cause damage to production materials." This move effectively put the brakes on what would have been the largest strike in Samsung’s history, and Samsung Electronics’ stock price soared by up to 6.65% in intraday trading on Monday.

Samsung Electronics accounts for 12.5% of South Korea’s GDP, 22.8% of total exports, and 26% of total stock market capitalization. Prime Minister Kim Min-seok warned that if the strike happens, direct losses could reach 1 trillion won (roughly $664.7 million), and if chip production disruptions cause in-process wafers to be scrapped, economic losses could rise to 100 trillion won.

Labor-Management Dispute Widens, Negotiations Deadlocked

Samsung’s labor and management have held multiple rounds of talks over salaries for 2026, but core disagreements have widened and negotiations eventually broke down. The final round of negotiations took place on Monday.

The union’s key demands include setting performance bonuses at 15% of Samsung’s operating profit, removing the bonus cap, and establishing a formalized bonus structure. According to Yonhap News Agency, Samsung management offered to use 10% of operating profit for bonuses and provide a one-time special compensation plan, but a significant gap remains.

In mid-March this year, more than 66,000 union members participated in a vote, with 93.1% in favor of striking. The full-scale strike is scheduled from May 21 to June 7.

The union stated that a rally on April 23 with 40,000 workers caused wafer foundry output to drop 58% and memory chip production to fall 18% that day. The union estimates that if the 18-day strike goes ahead, Samsung could lose about 30 trillion won (roughly $20 billion).

Facing the threat of a strike, several high-ranking government officials have made public statements, showing their seriousness about the crisis.

Prime Minister Kim Min-seok stated on Sunday that if the strike risk may cause "major damage," the government will explore all measures, including "emergency adjustment." According to South Korean law, if a labor dispute is deemed likely to harm the economy or public life, the labor minister can invoke the "emergency adjustment" mechanism, suspending industrial action for 30 days. Kim characterized Monday's negotiations as the "last chance" to avoid a strike.

Finance Minister Koo Yoon-cheol also warned last week on X that "a strike must not occur under any circumstances," emphasizing that Samsung Electronics is "a company the whole world is watching," and called for principled negotiations. Samsung Chairman Lee Jae-yong made a rare public apology to global customers on Saturday for causing "concern and unease."

Supply Chain Shock Impacts Global Semiconductor Market

The impact of this strike crisis has gone beyond South Korea and sparked global concerns over semiconductor supply.

As a key global manufacturer of memory chips, disruption to Samsung’s production could further exacerbate the already tight supply situation driven by the global AI data center boom, affecting industries such as automotive, computers, and smartphones.

Analysts also warn of concentration risk in Korea’s stock market, stating that excessive reliance on a few large companies increases volatility and makes the market more susceptible to geopolitical shocks and slowing data center spending. The partial injunction provides some buffer to the situation, but if final negotiations collapse, market uncertainty will rise significantly.

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