Samsung’s largest labor union in South Korea has suspended a planned strike set to begin on May 21 following a tentative agreement with the company. The strike would have involved nearly 48,000 workers from Samsung’s memory division, which represents its largest revenue source, and was scheduled to last for 18 days.
Union leader Choi Seung-ho announced that workers will vote on the tentative agreement from May 22 to May 27, with a final decision to come post-vote. “With a humble attitude, we will build a more mature and constructive labour-management relationship to ensure that such an incident never happens again,” Samsung stated.
The strike was initially called amid failed negotiations regarding bonuses, specifically demanding the removal of a cap on bonuses equivalent to 50% of annual salaries. The union aimed to secure 15% of annual operating profits as a bonus pool, citing that rival SK Hynix provided its employees with significantly higher bonuses.
According to Reuters, Samsung agreed to eliminate the bonus cap and to allocate 10.5% of annual operating profits for employee bonuses. Of this amount, 40% will be designated for workers in the memory chip division, while the remaining 60% will be divided among other units, Yonhap News reports.
Bonus payouts are contingent on the memory division generating at least KRW 200 trillion ($133 billion) in profit from 2026 to 2028 and KRW 100 trillion ($66 billion) from 2029 to 2035. Additionally, a portion of these bonuses will be paid in company stock for a minimum of 10 years.
The government intervened quickly after the strike announcement, with Labor Minister Kim Young-hoon mediating the discussions. Samsung plays a crucial role in the South Korean economy, accounting for 12.5% of the nation’s GDP. The company, which reported KRW 53.7 trillion ($35.63 billion) in operating profit for the first quarter of 2026, stands as the world’s largest memory chip maker.
Prime Minister Kim Min-seok indicated that potential direct financial losses from the strike could reach KRW 1 trillion ($669 million). The overall economic impact could soar to KRW 100 trillion ($66 billion) if production was halted during the strike.
