Samsung Electronics union withheld about the start of a planned 18-day strike on Wednesday after a last-minute tentative pay agreement was reached with management, easing immediate concerns about a possible shutdown at the world’s leading memory chip maker.
The tentative agreement comes about six months after the union was formed in November 2025. During this period, relations between employees and employers deteriorated significantly, culminating in a public apology from Samsung Electronics CEO Lee Jae-yong in May.
The Main trigger of the collective bargaining conflict was a compensation system introduced by rival chipmaker SK Hynix. As the explosive growth of the AI industry boosted the broader memory chip sector, SK Hynix introduced a lucrative rewards system that allocates 10 percent of its annual operating profits to employee bonuses.
Samsung workers openly expressed frustration with their compensation after witnessing SK Hynix employees receive record-breaking payouts. As a result, union membership jumped from about 6,300 in September 2025 to over 76,000 in April 2026. The union now represents nearly half of Samsung’s 130,000 domestic workforce.
The path to agreement was fraught with tension. After the initial negotiations failed, mediation led by the head of the Gyeonggi Regional Employment and Labor Office also failed, prompting the union to call a general strike that was scheduled to begin on May 22.
A breakthrough was achieved just eight hours before the strike deadline, driven by unprecedented direct intervention from Employment and Labor Minister Kim Younghoon. It is highly unusual for a cabinet minister to participate directly in negotiations for a particular company.
According to the tentative agreement, the performance bonus pool will be set at 11.5 to 12 percent of the company’s operating profit, with no cap set. In return, the company management stipulated several conditions: bonuses would only be granted if certain performance targets were achieved and, subject to a mandatory lock-up period, they would be paid out in company shares instead of in cash.
The deal now depends on a union-wide vote scheduled May 22-27, which requires a simple majority to pass. However, Concerns about internal tensions remain. Because Samsung Electronics comprises different business units with varying financial performance, there are ongoing concerns about possible conflicts between union members from different departments over the new bonus structure.
