South Korean electronics giant Samsung (SSNLF) is facing a strike by employees after contract negotiations with its workers union collapsed.
Management and union leaders at Samsung Electronics failed to reach a last-minute deal, raising prospects for a strike at the company that could disrupt the global semiconductor market.
South Korea’s government has threatened to invoke rarely used emergency powers to force a settlement at Samsung, saying the company is strategically important to the country’s economy.
The workers’ union, which represents more than 70,000 employees, says Samsung has failed to offer adequate wage increases despite achieving soaring profits in recent years.
The union says that workers will begin an 18-day strike starting on May 21.
Management at Samsung have accused the union of requesting excessive compensation packages for workers.
The two sides say they’ll continue efforts to reach a deal even as a strike approaches.
Samsung and its South Korean rival SK Hynix (HXSCL) produce two-thirds of the world’s memory chips, which are in short supply due to soaring demand from the artificial intelligence (A.I.) buildout.
Samsung said last month that its operating profit for this year’s first quarter rose eightfold to a record $38 billion U.S.
Union leaders have demanded that Samsung spend 15% of its annual operating profit on employee bonuses and scrap bonus caps.
The strike is expected to hurt production of Samsung’s smartphones and other consumer electronic devices.
However, the worst pain could be seen in the global memory chip market that is struggling to keep up with skyrocketing demand.
South Korea’s government said it is also considering getting a court injunction against the planned strike to force Samsung to continue operating.
SSNLF stock, which trades on the over-the-counter market in the U.S., is currently trading at $140 U.S. per share, up 268% over the past 12 months.
Tech Insider
