The 18-day strike starts tomorrow as memory chip supplies are already tightening. More than 47,000 Samsung Electronics workers are preparing to strike for 18 days after bonus payment negotiations between the company and its union failed. The strike will commence on Thursday and affect Samsung’s domestic chipmaking facilities, raising concerns about the already limited memory chip production amidst the ongoing shortage.
Though the union consented to mediation proposed by South Korea’s National Labor Relations Commission (the specifics remain undisclosed), Samsung Electronics’ management dismissed the deal without explanation, Nikkei Asia reports.
The Samsung union is demanding performance bonuses equal to 15 percent of the company’s operating profit and the removal of a 50 percent cap on annual wage bonuses. The breakdown in negotiations comes amid record profits for Samsung, which is the world’s largest memory chip producer.
Both Samsung and the workers’ union were encouraged by South Korean government officials to reach an agreement prior to the strike, with Prime Minister Kim Min-seok reportedly warning that the government might intervene to prevent the strike. South Korean law allows for an “emergency adjustment” to be enacted when disputes could negatively impact the economy or everyday life. Samsung is South Korea’s largest company, accounting for about 23 percent of the nation’s exports and 26 percent of its total market capitalization, according to CNBC.