More than 47,000 Samsung Electronics are preparing for an 18-day strike after negotiations over bonus payments between the company and its union collapsed. The strike is set to begin on Thursday and will be limited to Samsung's domestic chip factories, raising concerns about already limited memory chip production amid an ongoing shortage.
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While the union had agreed to mediation proposed by South Korea's National Labor Relations Commission (the details of which have not been made public), Samsung Electronics management rejected the agreement without explanation, as reported by Nikkei Asia.
As part of its demands, Samsung's union is seeking performance bonuses equivalent to 15% of the company's operating profit and the removal of the cap on bonuses, which is 50% of annual salaries. The collapse of negotiations comes during a period of record profits for Samsung, which has established itself as the world's largest producer of memory chips.
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Both Samsung and the workers' union had been urged by South Korean government officials to reach an agreement in the days before the strike, with Prime Minister Kim Min-seok saying the government might intervene and prevent the strike from going ahead. South Korean law allows for an "emergency settlement" when disputes could harm the economy or daily life.
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Samsung is South Korea's largest company, responsible for about 23% of the country's exports and 26% of its total market capitalization, according to CNBC.
