Samsung’s Chip Empire Under Pressure as Strike Threatens Massive Financial Losses

South Korean Prime Minister Kim Min-seok said on Sunday that the government is considering all possible measures, including emergency arbitration, to prevent a planned strike by workers at Samsung Electronics or reduce its economic impact if it takes place.

Samsung is the largest employer in South Korea and the world’s biggest manufacturer of memory chips, making any disruption to its operations a major concern for the national economy, according to Reuters.

The company and the workers’ union are scheduled to resume wage negotiations on Monday under government mediation, just three days before the planned strike. The talks are seen as an attempt to ease concerns over a potential disruption at one of the country’s most important technology companies, which accounts for nearly a quarter of South Korea’s exports.

During an emergency meeting with ministers, the prime minister warned that even a single day of halted operations at Samsung’s semiconductor plants could result in direct losses of up to 1 trillion won, or about $667 million.

He added that the greater concern is that any temporary shutdown of semiconductor production lines could trigger months-long disruptions, with total economic losses potentially rising to 100 trillion won — approximately $67 billion — if materials are forced to be discarded because of the strike.

Kim noted that Samsung represents 22.8% of South Korea’s exports, accounts for 26% of the country’s stock market, employs more than 120,000 people, and works with around 1,700 suppliers.

Under South Korea’s emergency arbitration system, the labor minister can suspend union actions for 30 days if the government believes the dispute could seriously harm the economy or public life. During that period, the National Labor Relations Commission oversees mediation and arbitration efforts.

The measure is considered extremely rare and has only been used four times since it was introduced in 1963. The last use was in 2005 during a strike at Korean Air, when the government intervened to prevent major disruptions to transportation services

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The union stated on Sunday that it would not yield to pressure related to arbitration and would reject any wage agreement it considers inadequate. However, it said it would continue negotiating with management in good faith to reach a settlement.

The union plans to begin an 18-day strike starting May 21, as disagreements continue over performance bonuses linked to the company’s AI-related semiconductor profits, according to Yonhap News Agency.