SOUTH KOREA PERSPECTIVE

Seoul, May 20, 2026. The day began on a sour note for South Korea's largest employer. In the morning, salary negotiations between Samsung Electronics and its main union collapsed for the second time in a row at the National Labor Relations Commission. The union, which had accepted the proposal for mediation, immediately announced that it would maintain the planned 18-day general strike starting Thursday, May 21, involving some 48,000 workers.

The crux of the conflict revolves around the distribution of performance-based bonuses tied to the semiconductor segment, fueled by the global supercycle in memory and demand for AI chips. Management proposed a bonus calculated on 10% of operational profit with a cap on payouts; the union demanded fixed bonuses equivalent to 15% of the semiconductor division's operational profit, without capping. A point of agreement had been reached on the abolition of the 50% cap on annual salary, but the distribution of bonuses between profitable and loss-making units remained contentious.

The economic stakes are enormous. According to sector estimates, an 18-day work stoppage could cost up to 100 billion wons (approximately $66.98 billion) to the South Korean economy. Samsung alone accounts for nearly a third of the global DRAM market and some 35% of the country's total exports come from semiconductors.

Facing the threat, the Cheong Wa Dae presidential palace expressed its 'deep regret' over the morning mediation failure, urging both parties to 'do their utmost until the last deadline.' Prime Minister Kim Min-seok had mentioned the possibility of an emergency arbitration order, a legal measure allowing the suspension of a social conflict for 30 days if it threatens the national economy. President Lee Jae Myung stated during a cabinet meeting that collective labor actions should respect 'certain limits' and not inflict 'serious harm' on others.

In the evening, a provisional agreement was finally reached thanks to direct mediation by Labor Minister Kim Young-hoon. The union announced the suspension of the planned strike and organized a ratification vote among its members starting the following Saturday.