South Korean President Lee Jae Myung urged respect for both labor and management rights on Monday as an 18-day strike involving more than 47,000 workers at Samsung Electronics looms large over the nation's economy. The president posted on X in Korean that labor must be respected as much as business, and corporate management rights must be respected as much as labor rights. He added that excess is not beneficial and extremes lead to reversal, according to a translation of his statement. Lee's comments come amid growing pressure from government officials for Samsung and its workers' union to reach an agreement before the planned walkout set to begin on May 21.
A final round of talks between the union and Samsung's management was scheduled for Monday, marking what officials described as the last chance to avert the action. The union's demands focus on Samsung's performance-based bonus system, including performance bonuses equivalent to 15 percent of the company's operating profit, the removal of bonus payout caps, and a formalized bonus structure. Samsung's management has countered with an offer to allocate 10 percent of operating profit to bonuses along with a one-time special compensation package, according to South Korean news agency Yonhap.
Shares of Samsung Electronics jumped as much as 6.65 percent on Monday amid the developments. On Sunday, South Korean Prime Minister Kim Min-seok said the government would explore all possible response measures, including emergency adjustments, if the strike risks causing significant damage. Under South Korean law, the labor minister can invoke an emergency adjustment to suspend industrial action for 30 days if a dispute is deemed likely to harm the economy or daily life.
Kim described Monday's negotiations as the final opportunity to avert the strike, warning that the economic losses would be beyond imagination. He estimated that direct losses from the strike could reach 1 trillion won, or about $664.7 million. The economic loss could rise to as much as 100 trillion won if chip production disruptions force Samsung to scrap semiconductor wafers already in production, he added.
Samsung Electronics accounts for 22.8 percent of South Korea's exports and 26 percent of its total market capitalization, Kim highlighted. Seoul's presidential office also noted that Samsung Electronics revenue accounts for 12.5 percent of South Korea's GDP. Analysts have raised concerns about concentration risks in South Korea's stock market, pointing to an overreliance on a small group of companies that raises the risk of volatility and vulnerability to geopolitical shocks, including a slowdown in data-center spending.
Kim's statements followed an X post by Finance Minister Koo Yun Cheol last week warning that strikes must never happen under any circumstances. Koo wrote that Samsung Electronics is an important company that the world is watching and that both labor and management sides must continue to strive to achieve principled negotiations, considering the current management situation and its impact on the national economy.
Samsung chairman Lee Jae-yong issued a rare public apology to customers worldwide on Saturday for causing worry and anxiety, according to South Korean media reports. The union said more than 47,000 workers could participate in the strike. It also reported that a rally on April 23, which drew 40,000 workers, led to a 58 percent drop in foundry production and an 18 percent decline in Samsung's memory production that day.
The union estimated that an 18-day strike could cost Samsung about 30 trillion won, or about $20 billion. Government officials have emphasized the broader stakes, noting Samsung's central role in the country's semiconductor industry and export economy. The potential disruption comes at a time when global demand for chips remains a key driver of economic performance in South Korea.
Union leaders have pushed for changes to the bonus system to better reflect company profits and provide greater stability for workers. Management has maintained that its offer balances employee compensation with the need to maintain operational flexibility amid fluctuating market conditions. Both sides have continued negotiations in recent days, though significant gaps remain on key issues such as the percentage of profits allocated to bonuses.
Officials said the strike could affect not only Samsung's operations but also supply chains for electronics manufacturers worldwide. The company produces a substantial share of the world's memory chips and other critical components used in smartphones, computers, and data centers. Any prolonged stoppage would likely ripple through global technology markets, according to industry observers.
President Lee's call for balanced respect between labor and management reflects ongoing efforts by the government to mediate the dispute without direct intervention. The prime minister's mention of emergency adjustments underscores the seriousness with which authorities view the situation. If talks fail to produce an agreement by the deadline, the strike would mark one of the largest labor actions in Samsung's history.
Workers have expressed frustration over what they see as inadequate sharing of profits during periods of strong performance. Company representatives have pointed to competitive pressures in the semiconductor sector as a reason for caution on expanding bonus commitments. The upcoming negotiations on Monday will determine whether these positions can be reconciled before the May 21 start date.
Broader economic implications include potential impacts on South Korea's overall growth trajectory and investor confidence in the country's flagship industries. Samsung's market position makes it a bellwether for national economic health, with its performance closely watched by policymakers and financial markets alike. As the deadline approaches, attention remains focused on whether a last-minute deal can prevent widespread disruption.