Samsung Electronics asked its largest union on Friday to return to the bargaining table without preconditions, and the union agreed. Talks could resume on June 7, three days after a planned 18-day strike that begins on May 21.
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This proposal for unconditional dialogue was met with a timetable that extends beyond the strike. The proposal was confirmed by the union and acknowledged by Samsung, two days after government-brokered negotiations at the National Labor Relations Commission collapsed.
Investors reacted negatively, with Samsung shares falling as much as 7.6% on the Korea Exchange on Friday morning, compared with a 1.1% on the KOSPI index, before recovering some losses during the session.
The dispute is not about wages but about the formula for calculating bonuses. The National Samsung Electronics Union (NSEU) is seeking to remove the existing cap on performance bonuses, set at 50% of base salary, and establish a profit-sharing system at 15% of the semiconductor division's operating profits.
Samsung has proposed a lump sum payment for 2026 and a profit distribution of about 13%, but has not committed to a permanent structural change. In contrast, SK Hynix agreed last September to scrap its bonus cap and allocate 10% of annual operating profits to staff for ten years.
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Based on projections for 2026, that could lead to six-figure dollar payouts per worker among about 35,000 employees. Samsung semiconductor workers, observing the situation at SK Hynix, want a similar formula codified in their contract rather than left to the chairman’s discretion.
The timing of the standoff is critical. Samsung's market capitalization, which reached $1 trillion earlier this month, is largely driven by its semiconductor division, particularly the HBM and server DRAM lines that the union is threatening to shut down.
JPMorgan 18 -day outage could cost Samsung upwards of about $2.9 billion in direct semiconductor revenue, while the union estimates the cost could reach 30 trillion won. While these estimates are not directly comparable, both exceed the gap between the two sides in the negotiations.
South Korea's government has expressed concern about the potential strike, as semiconductors accounted for about 37% of the country's total exports in April. The prime minister and finance minister have stressed the need to avoid a strike at the world's largest memory maker.
The labor minister has yet to invoke emergency arbitration, a rarely used mechanism that would suspend industrial action for 30 days. Samsung said it remains open to dialogue and regrets the union's decision to go ahead with the strike.
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The NSEU, which has about 36,000 members and represents about 30% of the workforce, said it would consider any new proposals in writing before May 21, but would not postpone the strike for further negotiations. The June 7 date is not a starting point for discussions; it is simply the timetable.
