Industry minister warns of arbitration if Samsung unions strike

South Korea's industry minister warned Thursday that the government would invoke emergency arbitration if Samsung Electronics unions proceed with a planned strike next week, describing potential production halts as an irreversible threat to the country's AI semiconductor supply chain.

Samsung's semiconductor division supplies chips critical to global AI computing, and a disruption could cost an estimated 100 trillion won ($66.98 billion) in wafer processing losses while rippling through some 1,700 supplier firms, according to the Korea Times. The Korean government has called Samsung semiconductors the country's "unrivaled growth engine and core strategic asset."

Industry Minister Kim Jung-kwan posted Wednesday on X, formerly Twitter, that Samsung's operations could not be jeopardized. "Considering the seriousness of the matter and the unimaginable ripple effects, a strike must be prevented under any circumstances," Kim said, according to the Korea Times. "As industry minister, I believe emergency arbitration would be unavoidable if a strike occurs," he added.

Government-led mediation talks between Samsung management and its unions ended Wednesday without a deal. The National Labor Relations Commission officially requested a follow-up session for Saturday. The dispute centers on performance-based bonuses linked to earnings from Samsung's AI semiconductor business.

"A strike could inflict irreversible economic damage," Kim warned. The Korea Times reported the potential losses at roughly 100 trillion won — about $66.98 billion — in wafer processing disruptions alone, with approximately 1,700 partner firms also at risk.

Under South Korean labor law, the labor ministry may invoke emergency adjustment measures to suspend a strike for up to 30 days if officials determine the work stoppage would seriously harm the national economy or disrupt citizens' daily lives.

Labor Minister Kim Young-hoon also urged both sides to resolve the dispute through negotiation. "There is no company without workers, and no labor union is established to destroy a company," Kim Young-hoon said, according to the Korea Times. "If a strike itself is not the ultimate goal, it must eventually end through negotiations," he added.

Both parties are expected to resume talks Saturday. If those discussions fail, Samsung's unions have scheduled a full-scale strike to begin next Thursday.