Tensions are rising around Samsung Electronics in South Korea. Some 48,000 workers are set to go on strike for 18 days after negotiations with the company over semiconductor profits fail. The government wants to avoid repercussions on the domestic and global economies, reopening the debate on its controversial special powers in such cases.

Seoul (AsiaNews) – South Korea is getting ready for one of the largest industrial strikes in recent years. Approximately 48,000 workers at Samsung Electronics, one of the world's largest semiconductor manufacturers, are threatening to go on strike for 18 days starting tomorrow after wage negotiations between the company and the union failed.

Fearing the strike’s impact on the country’s economy, especially the chip supply chain, the South Korean government has intervened directly with Labour Minister Kim Young-hoon, who today mediated emergency talks between the parties.

The dispute comes at a delicate time for South Korea. Semiconductor exports account for about 35 per cent of the country's total exports and have fuelled recent economic growth linked to artificial intelligence (AI) and data centres.

In the first quarter of 2026, South Korean exports hit a record high of US$ 219.9 billion, with a 139 per cent increase in chip exports compared to the previous year.

The labour dispute is linked to the company's bonus system, which is based on profits from semiconductor sales. These bonuses are not automatic because each year Samsung decides how much to allocate to bonuses and can impose maximum limits on the amounts paid.

Samsung has proposed keeping the current incentive system, but calculating the bonus fund at 10 per cent of operating profit and introducing a new, more flexible compensation scheme that gives management greater discretion.

The main union, however, is demanding fixed bonuses equal to 15 per cent of the semiconductor division's operating profits and the elimination of pay caps.

According to industry sources, during government-mediated negotiations, the parties reached a preliminary agreement on the abolition of the bonus cap set at 50 per cent of annual salary.

However, significant disagreements remain over the distribution of incentives to loss-making divisions and, above all, the ratification of the agreement.

The union claims to have accepted the proposal made by government mediators, accusing the company of refusing to sign it. Samsung, for its part, expressed "deep regret," saying it had already met most of the union's demands, accusing workers of seeking “unreasonably large” compensation, even for the least profitable units.

While workers are demanding a greater share of the enormous profits generated by the AI boom, the government fears that any slowdown could weaken the country's technological competitiveness at a time of growing global rivalry between the United States and China over control of the semiconductor supply chain.

The decision to undertake so massive a strike that it elicited the government's response has broadened the debate on the executive branch's powers.

Under Section 76 of the Trade Union and Labour Relations Adjustment Act, the Minister of Labour can issue an emergency arbitration order if a labour dispute seriously threatens the country’s economy or the daily lives of the population.

This is a controversial instrument, invoked only four times since 1963, the last in 2005 during the Korean Air and Asiana Airlines pilot strikes. If the measure were to be applied to Samsung, it would be the first time in more than 20 years.

The order would require unions to immediately suspend any strike for up to 30 days, transferring the legal dispute to the National Labour Relations Commission, which could impose a binding decision through arbitration.

At that point, the strike could be deemed illegal, exposing union leaders to legal consequences.

Economists fear that a prolonged production shutdown at Samsung could have enormous effects on the global economy, already slowed by the blockade of the Strait of Hormuz.

According to some estimates, an 18-day strike could reduce global supply of DRAM chips (fast memory for processing data) by 3 per cent to 4 per cent and NAND memory (memory used to store data) by 2 per cent to 3 per cent, causing further price increases.

Samsung controls approximately a third of the global market for DRAM, which is essential for smartphones, laptops, and especially the infrastructure that enables AI software.

The company had recently regained the leading position in the world thanks to growing sales of HBM chips, an advanced version of DRAM designed specifically for AI, and specialised processors, used primarily by Nvidia, which dominates the market.

Financial markets, already down following tentative talks between US President Donald Trump and Chinese President Xi Jinping last week and the ongoing stalemate over the war in the Middle East, are jittery about developments in South Korea.

Samsung represents about a quarter of the market capitalisation of South Korea’s main stock index, the KOSPI, and any strike could drag down the entire market.

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• samsung
• strike
• mediation
• arbitration
• semiconductors
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• dram
• nand
• memory