Shares of Samsung Electronics (KS:005930) declined on Wednesday after government-mediated negotiations with the company and the National Samsung Electronics Union ended without an agreement, increasing the likelihood of a large-scale work stoppage.
In Seoul trading the stock dropped more than 5% to 264,000 won following the breakdown in talks that stretched into the early hours of Tuesday. The marathon negotiations, which were overseen by government mediators, concluded with no settlement reached between the two sides.
The union, which represents in excess of 50,000 workers, has indicated it will move forward with an 18-day strike set to start on May 21 unless Samsung management improves its proposals on wages and performance bonuses. The union’s demands include the removal of a cap on bonus payouts and a larger share of profits tied specifically to the company’s growing artificial intelligence chip business.
The labor dispute unfolds as Samsung pushes to close the gap with rival SK Hynix Inc (KS:000660) in the market for high-bandwidth memory chips used in Nvidia’s AI processors. Employees have highlighted that SK Hynix provided substantially larger bonuses following what the article describes as its strong AI-driven earnings growth, and they are seeking comparable compensation from Samsung.
Samsung issued a statement expressing regret over the collapse of the talks and said it would continue dialogue with labor representatives. Beyond the immediate negotiations, the disagreement centers on bonus structure and how profits from the company’s AI-related chips are shared with the workforce.
Summary
Government-mediated talks between Samsung and its largest union ended without a deal, the union has proposed an 18-day strike beginning May 21, and shares fell to 264,000 won in Seoul after the breakdown. Key issues include the cap on bonus payouts and demands for a greater share of profits tied to Samsung’s AI chip business as the company competes with SK Hynix in high-bandwidth memory.