This deadlock followed extensive negotiations on Monday and Tuesday facilitated by the government, amid increasing public and governmental pressure for Samsung workers to reach a compromise and avoid a strike.
“I regret to inform you that none of the items proposed by the union have been addressed,” union representative Choi Seung-ho informed reporters around 3 a.m. local time on Wednesday.
He stated that the company neglected to tackle union requests to reform the pay structure, including the elimination of a 50% cap on bonus pay based on annual base salary, and to calculate it exclusively on operating profit.
The union has asserted that if its demands remain unmet, workers will conduct a strike for 18 days starting May 21. This could lead to shipment delays, rise in chip prices, and potential advantages for competitors.
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The union representative mentioned that there are currently no plans to reconvene talks with management prior to the strike date, although he would be open to considering “a reasonable proposal” should the company present one.
The National Labour Relations Commission stated it had offered “various alternatives,” but decided to conclude the discussions “due to the significant divide between both sides’ positions and the union’s request to pause the negotiations.”
Samsung has not provided immediate comments.
Workers have expressed anger over what they perceive as a large disparity in bonus compensation compared to rival SK Hynix, which has taken the lead in supplying high-bandwidth memory for artificial intelligence chip units to Nvidia following the ChatGPT launch in late 2022.
Last year, SK Hynix eliminated its pay cap, leading to bonuses exceeding three times those received by Samsung workers, which has resulted in a surge in Samsung union membership.
The frustration among employees has intensified due to Samsung’s record profits, driven by the AI industry’s demand for chips.
Just last week, Samsung became the second Asian company, following TSMC, to achieve a market capitalization exceeding $1 trillion.
Shin Je-yoon, Samsung’s chairman of the board, cautioned that a strike could adversely affect investors and employees, as well as have serious repercussions for the Korean economy. He expressed concern about potentially losing market leadership due to fleeing customers and diminishing competitiveness if strikes disrupt production.
(Edited by : Juviraj Anchil)
