Samsung, union resume talks to avert 18-day strike threat

Samsung Electronics and its main labor union resumed negotiations Wednesday in a last-ditch effort to avert a walkout by nearly 48,000 workers — a strike that analysts warn could disrupt global semiconductor markets and shave growth from South Korea's broader economy.

The dispute — the largest labor confrontation at the South Korean chipmaker since Chairman Jay Y. Lee pledged to end union-busting practices in 2020 — puts at risk roughly one-quarter of South Korea's total exports and, in a worst case, could trim the country's projected 2.0 percent economic growth by half a percentage point, according to government economists cited by The Korea Times.

Talks mediated by the National Labor Relations Commission dragged nearly 15 hours into Tuesday night without a breakthrough. Commission Chair Park Su-keun told reporters afterward that "the management and union have not reached common ground on one issue," according to The Korea Times. Both sides returned to the table Wednesday for a final push before a strike deadline set for Thursday.

The union is demanding removal of a 50 percent cap on annual bonuses and a formal contract provision allocating 15 percent of Samsung's annual operating profit to worker bonuses. Workers point to a growing pay gap with rival SK Hynix, whose employees collected bonuses more than three times larger than Samsung workers received last year — a disparity union leaders say has fueled both employee departures and a surge in union membership.

The threat has rattled global chip markets. An 18-day walkout could reduce worldwide DRAM memory supply by three to four percent and NAND flash supply by two to three percent, industry analysts estimated, according to The Korea Times. Samsung is a key supplier to major clients including Nvidia.

South Korean Industry Minister Kim Jung-kwan urged both sides to reach a settlement, telling parliament Tuesday that "the reality is that all of our citizens are worried about this, considering the ripple effects that a Samsung strike could bring," The Korea Times reported. Government economists estimated a full 18-day strike could cut 0.5 percentage points from the country's projected 2.0 percent growth this year.

Investors are watching the contract language closely. "The point is how they negotiate the formalising of pay increases," said Lee Seung-yub, portfolio manager at Quad Investment Management, according to The Korea Times.

A South Korean court ruled separately that 7,087 workers must maintain essential operations during any strike, providing a partial buffer against full production shutdowns at Samsung's chip facilities.

Negotiators are set to reconvene Wednesday in Sejong under National Labor Relations Commission mediation, with the strike deadline hours away. The outcome could shape global chip supply chains and test Samsung's post-2020 commitment to labor relations reform.