(May 18): Samsung Electronics Co’s shares climbed more than 6% after its union signalled a willingness to negotiate and a local court granted the company’s request to curtail a potential strike, blunting the chances of a major chip production disruption.
Fresh talks began on Monday with the union’s top leader saying he would “sincerely engage” with company executives. Many of Samsung’s requests to prevent certain labour actions were granted by a South Korean court, including barring the union from occupying company facilities. Samsung’s shares climbed as much as 6.7% in Seoul, reversing earlier losses.
The union has threatened to begin an 18-day strike last Thursday if its demands are not met. Any production halts at Samsung could ripple through the global technology supply chain. The company is the world’s biggest supplier of the chips that go into devices from data centre servers to smartphones and electric vehicles.
The talks underscored simmering tensions across South Korea as workers push for a greater share of the profits that companies like Samsung and SK Hynix Inc are deriving from a global artificial intelligence (AI) infrastructure boom. Monday’s meeting follows days of escalating rhetoric and a failed round of mediation that had fuelled investor anxiety over potential walkouts at Samsung’s sprawling semiconductor campuses in South Korea.
Samsung’s sharp rebound on Monday shows “there is a clear need for both sides to reach an agreement”, said Tom Kang, a director at Counterpoint Research. Both sides have relatively little experience because Samsung historically doesn’t have a strong union culture. “The gap may seem large, but the issues are workable,” he said. “I believe the differences can be resolved without a strike.”
Over the weekend, Prime Minister Kim Min-Seok urged both sides to resolve their differences through dialogue. Samsung’s executive chairman Jay Y Lee also made a rare public overture, describing union members as “one family”. In a concession, Samsung accepted a union request to replace its lead negotiator with the head of the chip division’s people’s team.
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On Monday, a law firm representing the union said it was planning to proceed with industrial action scheduled for May 21, adding that it “will continue to participate sincerely in the ongoing labour-management negotiations with the goal of reaching an agreement”.
The union has been pushing Samsung to expand performance-based compensation following a sharp rebound in semiconductor earnings driven by surging demand for AI infrastructure. Labour leaders are demanding that Samsung scrap an existing cap on bonuses, allocate 15% of operating profit to worker bonuses and formalize those terms in employment contracts.
Samsung has proposed allocating 10% of operating profit to bonuses, along with a one-time special compensation package that exceeds industry standards. Company executives have argued that the union’s demands would be difficult to sustain over the long term.
Uploaded by Tham Yek Lee
