SEOUL — Samsung Electronics workers' union said late Wednesday that a planned strike had been put on hold until further notice after negotiations with management resumed with the participation of Seoul's labor minister.
The company's management and workers' union had resumed talks earlier in the day in a last-ditch attempt to avert a strike.
The labor union had said it would begin a strike on Thursday after talks over bonuses broke down, raising concerns about potential disruption to semiconductor production.
But late Wednesday, it said the planned strike "will be put off until further notice," adding that it would put a tentative wage deal to a vote.
All members will participate in the vote, which will take place between May 23 and May 28, the union said.
Labor Minister Kim Young-hoon said the company's management and union reached a tentative agreement through voluntary negotiations, and thanked both parties for "holding fast to the thread of dialogue until the very end."
Samsung's management apologized for the "concern caused" by the dispute, vowing to "build a more mature and constructive labor-management relationship so that such a situation does not arise again."
The walkout was expected to dwarf a 2024 strike that drew about 6,000 workers, as anger flares among staff over how the company distributes its massive profits from an artificial intelligence-fueled boom.
Samsung reported a roughly 750-percent jump in first-quarter operating profit year‑on‑year, while its market capitalization topped $1 trillion for the first time in May.
The union had called for the scrapping of a bonus cap set at 50 percent of annual salaries and for 15 percent of operating profit to be allocated to bonuses.
According to the union's lawyer, around 50,500 workers were set to walk off production lines for 18 days from Thursday following the breakdown of negotiations with management.
In response, Samsung's management had said the earlier talks failed because "acceding to the labor union's excessive demands would risk undermining the fundamental principles of the company's management."
The standoff has raised concerns in South Korea, where semiconductors account for about 35 percent of exports and are a key pillar of the economy.
The presidential office had expressed "deep regret" over the collapse of talks earlier, urging both sides to continue negotiations given the strike's potential economic impact.
Experts said even a partial halt in Samsung's operations could prove damaging — though the union argues that production stoppages have already occurred in the past for reasons related to maintenance and equipment inspections.
Samsung's union argued workers at another South Korean chip giant SK hynix received bonuses last year that were more than three times larger than those paid at Samsung.
The union's lawyer said the company has seen a talent drain to its rival and a rise in union membership due to what workers describe as a "lack of transparency" in the bonus system.
Samsung’s first labor union was formed in the late 2010s despite the vow of the late founder Lee Byung-chul never to allow unions.
Limited impact?
Tom Hsu, an analyst at Taipei-based research firm TrendForce, said the potential impact of the strike, if it goes ahead, may be limited.
"Due to the high level of automation in front-end facilities, TrendForce expects Samsung's DRAM and NAND Flash production to remain at full capacity," he told Agence France-Presse (AFP).
"Any potential impact from the strike is likely to be confined to non-memory business segments."
A Suwon court this week largely granted Samsung Electronics an injunction requiring staffing and operations to be maintained at normal levels during any walkout, to prevent potential damage to the company's safety-related and other facilities.
Kim Sung-hee, director of Workers' Institute for the Industrial and Labor Policy, said that while the strike could cause losses, "they are unlikely to be irreversible."
The strike, if it happens, does not mean it would "automatically trigger an economic crisis," he told AFP.
Samsung Electronics shares inched up 0.18 percent by the close in Seoul on Wednesday.
