Samsung Electronics and Union Fail to Reach Wage Agreement in First Mediation Round

Samsung Electronics Co. and its largest labor union resumed government-led wage mediation talks Monday in an effort to avert a strike at the world's largest memory chipmaker, but the two sides again failed to reach an agreement. The talks resumed days after the first round of government-mediated negotiations ended without a deal over disagreements on performance-based bonuses, ahead of an 18-day strike scheduled to begin Thursday.

, representatives from management, the labor union and the government agreed to hold another round of discussions Tuesday.

Labor and management remained sharply divided over performance-based bonuses tied to earnings from the company's artificial intelligence (AI)-related semiconductor business amid the ongoing memory supercycle. Management has proposed maintaining the current excess profit incentive system while allowing the bonus pool to be calculated based on either 10 percent of operating profit or economic value added, known as EVA.

The company also proposed introducing a special compensation system, saying it would help create a more flexible incentive structure. The union, however, is demanding fixed performance bonuses equal to 15 percent of the semiconductor division's operating profit and the removal of payout caps.

Later Monday, a district court partially accepted Samsung Electronics' request for an injunction to block the planned walkout, ordering the union to ensure that any strike does not disrupt production. The Suwon District Court said staffing to prevent potential damage to safety-related and other facilities, and its products must be maintained at usual levels.

In response, the largest union said it respects the court's decision but made clear the strike will proceed as planned. Government officials have raised concern over the strike, suggesting Seoul may invoke emergency arbitration powers to prevent the strike.

Korean law, the labor minister can issue an emergency arbitration order if a dispute is deemed likely to harm the national economy or seriously disrupt the lives of ordinary people. Such an order would suspend industrial action for 30 days while the National Labor Relations Commission conducts mediation and arbitration.

Earlier in the day, President Lee Jae Myung said that companies' management rights should be respected as much as labor rights. "In South Korea, which has adopted the basic orders of democracy and free market economy, labor should be respected as much as companies, and corporate management rights should also be respected as much as labor rights," Lee posted on his X account.