Key Takeaways

• Stock slides: Samsung Electronics shares fell more than 2% in Seoul to 279,500 won, underperforming the broader market.
• High-stakes mediation: Management and labor entered a second day of government-led mediation talks after 11 hours of negotiations failed to produce a breakthrough.
• Strike threat looms: The union has threatened an 18-day strike beginning May 21 if talks collapse.
• Union demands: Workers want performance bonuses equal to 15% of operating profit, removal of bonus payout caps, and formal compensation guarantees.
• AI boom backdrop: Samsung is riding strong demand for high-end memory chips used in artificial intelligence applications.
• Recent earnings strength: The company reported a sharp jump in first-quarter operating profit last month.
• Tens of thousands at stake: The union represents a massive workforce that could bring production to a halt.
• Board chairman’s plea: Samsung’s chairman urged workers to resolve the dispute through dialogue, warning of damage to competitiveness and the South Korean economy.
• Global ripple effects: A strike could disrupt semiconductor supply chains worldwide at a critical moment for AI demand.

Samsung Electronics shares fell on Tuesday as investors closely tracked last-ditch negotiations between the company and its labor union aimed at averting a planned strike that could disrupt global semiconductor supply chains.

Shares in Samsung Electronics slipped more than 2% in Seoul trading to 279,500 won at 03:12 GMT, underperforming the broader market.

Mediation Talks Enter Day Two

Samsung management and labor representatives entered a second day of government-led mediation talks on Tuesday after more than 11 hours of negotiations failed to produce a breakthrough the previous day.

The union, which represents tens of thousands of workers, is demanding performance bonuses equal to 15% of operating profit, the removal of bonus payout caps, and formal guarantees on compensation structures, according to reports.

The group has threatened to launch an 18-day strike beginning May 21 if negotiations collapse.

A Strike at the Worst Possible Time

The labor dispute comes as Samsung is benefiting from booming demand for high-end memory chips used in artificial intelligence applications. The company last month reported a sharp jump in first-quarter operating profit.

Samsung’s board chairman earlier urged workers to resolve the dispute through dialogue, warning that industrial action could damage the company’s competitiveness and the broader South Korean economy.