Samsung Electronics and its labour union began negotiations on Monday in a final effort to prevent what could become the largest strike in the company’s history, amid fears that a walkout involving more than 45,000 workers could impact South Korea’s economy and disrupt global supply chains.
The proposed 18-day strike, set to begin on Thursday, comes at a time of severe global shortages in memory chips, critical components used in AI data centres, smartphones, and laptops. The supply crunch has driven sharp profit growth for Samsung and other chipmakers in recent months.
Monday’s talks follow the collapse last week of a first round of government-mediated negotiations over pay and bonuses at the world’s largest memory chipmaker, which accounts for nearly a quarter of South Korea‘s exports.
Adding to pressure on the union, a South Korean court partially granted Samsung’s request for an injunction, ordering the union to ensure any strike did not disrupt production.
The ruling means that a strike must not lead to the degradation of materials used in production, while operations related to safety and avoiding product damage must be maintained at normal levels, a court spokesperson said by telephone.
The two main unions could face fines of 100 million won ($72,000) per day each if they failed to comply, while union leaders could be fined 10 million won per day, the spokesperson said.
The union said in a statement the court ruling would not dissuade it from pursuing a strike if talks did not achieve a deal, but pledged to engage seriously in negotiations.
Shares Buoyed By Court Ruling
Samsung Electronics shares jumped as much as 6.7% after the court ruling, outperforming the benchmark KOSPI, which rose 1.4%.
South Korean officials have raised concerns that a strike could hurt economic growth, exports, and financial markets. President Lee Jae Myung said labour rights and management rights should be equally respected, adding that workers deserve fair pay while shareholders should also benefit from corporate profits.
Chips Feeding AI Boom
South Korean Prime Minister Kim Min-seok said the government may use emergency arbitration to prevent the strike, a move that would ban industrial action for 30 days during mediation.
The union rejected pressure to back down, while Samsung Electronics executives reportedly warned that key clients such as Nvidia could halt shipments over quality concerns during a strike. Talks are set to continue until Tuesday.
(With inputs from Reuters)
