Samsung faces strike after pay talks with union fall apart
[May 20, 2026] By
KIM TONG-HYUNG and HYUNG-JIN KIM
SEOUL, South Korea (AP) — Management and union leaders at Samsung
Electronics failed to reach a last-minute deal over wages Wednesday,
raising prospects for a strike at the South Korean electronics giant
that could rattle global semiconductor supplies and the country’s
trade-dependent economy.
Government officials have threatened to invoke rarely used emergency
powers to force a settlement at Samsung, where the union, which
represents more than 70,000 workers, says the company has failed to
offer adequate compensation despite its soaring profits fueled by the
global boom in artificial intelligence.
After the latest round of talks ended without a breakthrough on
Wednesday, union leader Choi Seung-ho told reporters that unionized
workers will begin an 18-day strike from Thursday.
Both the union and the management held each other responsible for a
failure to reach a deal. Choi accused management of refusing to accept a
government-mediated proposal whose details he refused to disclose. The
management accused the union of calling for excessive compensation
packages for workers at loss-making units.
The two sides said they will continue efforts to reach a deal. The two
sides met again Wednesday afternoon at the arrangement of Labor Minister
Kim Younghoon, according to Kim’s ministry.
Samsung and its cross-town rival, SK Hynix, together produce about
two-thirds of the world’s memory chips, which are seeing surging demand
driven by AI. Samsung said last month its operating profit for the
January-March quarter jumped eightfold to a record 57.2 trillion won
($38 billion).
Union leaders have demanded a compensation structure in which Samsung
would commit to spend 15% of its annual operating profit on employee
bonuses and scrap bonus caps, which are currently set at 50% of annual
salaries. The company says the demands are excessive, citing the highly
cyclical nature of the semiconductor business.
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Choi Seung-ho, a leader of the Samsung Electronics labor union,
leaves after attending the government-led mediation talks with
management at the National Labor Relations Commission office in
Sejong, South Korea, Wednesday, May 20, 2026 (Yonhap via AP)
 Prime Minister Kim Min-seok, the
government’s No. 2 official after President Lee Jae Myung, said in a
televised statement Sunday that the strike could cause up to 100
trillion won ($66 billion) in economic damage by disrupting
Samsung’s highly complex semiconductor manufacturing processes.
The planned strike also has a potential global impact. Given that
supply in the global memory semiconductor market is struggling to
keep up with demand, the Samsung strike was expected to further
drive up prices and push back AI infrastructure investments in other
countries, said Lee Jun, an expert at the Korea Institute for
Industrial Economics and Trade.
The strike was expected to hurt operations of Samsung’s production
of smartphones and other consumer electronics as well, observers
say.
A local court on Monday partially granted the company’s request for
an injunction against the planned strike, ruling that the union must
maintain certain staffing levels to prevent damage to facilities and
materials and ensure safe operations. The Suwon District Court also
barred unionists from occupying key facilities and offices.
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