Samsung Electronics' labor and management have ultimately failed to reach an agreement in the post-mediation process before the National Labor Relations Commission. The two sides had been undergoing post-mediation procedures since May 12 under government mediation but were unable to narrow their differences. With the union having announced a general strike for the 21st, forecasts are growing that the government may invoke its emergency adjustment authority.
On the 13th, the National Labor Relations Commission concluded the Samsung Electronics post-mediation process at around 3 a.m. that morning. Nearly 17 hours of negotiations only reconfirmed the gap between the two sides' positions. Choi Seung-ho, chairman of the Samsung Electronics branch of the cross-enterprise union, stated: "Because the differences between the labor union and management did not narrow, we requested mediation and waited for nearly 12 hours, but the proposal only worsened." Samsung Electronics expressed deep regret in a statement released hours later, saying the unions had "continued to insist only on a rigid institutionalization framework, rejecting the company's proposal for a more flexible system tied to performance."
At the core of the dispute is Samsung's performance-based bonus system. The union demanded the company institutionalize its bonus system to improve transparency and predictability, legally guaranteeing the allocation of 15 percent of operating profit as the source for performance bonuses — with the union also indicating that if the full 15 percent proves difficult, part of the compensation could be paid in shares. Management maintained its position of distributing an amount equivalent to 10 percent of operating profit without fixing the ratio in the collective bargaining agreement, and rejected removing the bonus cap out of concerns about undermining investment momentum for future growth.
The dispute has roots in a landmark 2025 deal at SK hynix, where Samsung's domestic rival agreed to allocate 10 percent of annual operating profit to a performance bonus pool. That arrangement reset expectations across the Korean industry and emboldened Samsung workers, who had watched SK hynix transform into a global high-bandwidth memory leader serving Nvidia.
The National Labor Relations Commission's mediation proposal included provisions to retain the Excess Profit Incentive (OPI) system based on Economic Value Added (EVA) criteria, with a 50% ceiling applied to both the Semiconductor (DS) and Device eXperience (DX) divisions. A special management performance bonus plan for the DS division was also proposed, involving an additional performance bonus within a range of 12% of operating profit — covering the portion exceeding the OPI cap. However, the union argued the proposal was conditional on achieving domestic first place in both sales and operating profit, making it in effect a structure premised on outperforming SK hynix. The DX division was excluded from the scheme entirely.
The financial stakes are considerable. JPMorgan analysts warned that Samsung's annual operating profit could fall by 7% to 12% if management accepts the union's core demands, estimating that allocating 10% to 15% of operating profit as performance bonuses and raising base salaries by 5% would generate KRW 21–39 trillion ($14.3–26.5 billion) in additional labor costs above current projections. Losses from a full walkout are expected to reach 1 trillion won ($671 million) per day, and prolonged disruptions to semiconductor production lines could lead to structural damage, including the possible loss of key clients such as Nvidia. A prolonged walkout could disrupt 3 to 4 percent of global DRAM supply and 2 to 3 percent of NAND flash supply, according to KB Securities estimates.
The union has announced a general strike from May 21 through June 7 — lasting 18 days. The Samsung Electronics branch of the cross-enterprise union has approximately 73,000 members, with around 41,000 having indicated their intention to participate, and the number expected to rise above 50,000. If a full-scale strike takes place, it would be only the second in Samsung's history; the first occurred in 2024, led by the National Samsung Electronics Union. During that dispute the union had about 32,000 members and only around 15% participated. A one-day strike in April 2026 offered a more recent preview: Samsung's memory fab output fell 18% on the affected night shift, and its contract foundry output dropped 58%.
Samsung Electronics has filed an injunction application with the Suwon District Court seeking to prohibit illegal industrial action. The court concluded a closed-door second hearing on Wednesday, attended by about 30 people including lawyers and officials from both sides, with a ruling expected as early as Thursday or Friday. Union chief Choi said that even if part of the injunction is accepted, "there will be no problem with the strike itself."
The possibility of the government invoking its emergency adjustment authority is also being raised. Under Article 76 of the Trade Union and Labor Relations Adjustment Act, the labor minister can issue an emergency arbitration order when industrial action poses a serious risk to the national economy or citizens' daily lives, suspending strike activity for 30 days and triggering a fresh round of commission-led mediation and binding arbitration. The measure has been used only four times in Korea's history: during a 1969 strike at Korea Shipbuilding Corp., a 1993 strike at Hyundai Motor, and during pilot strikes at Asiana Airlines and Korean Air in 2005. Invoking it now would carry significant political risks, as direct government intervention restricting labor actions could trigger strong backlash from organized labor, widely seen as state interference with workers' rights. Semiconductors account for 38 percent of Korea's total exports, however, lending weight to arguments that a prolonged Samsung strike could meet the threshold of serious harm to the national economy required to justify its use.
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