Samsung workers push ahead with 18-day strike
What's the story
Samsung Electronics' labor union has stuck to its plan of a strike, even after the company offered unconditional pay talks. The union's decision sent the company's shares down as much as 5.9%. The collapse of government-mediated negotiations over pay and bonus schemes this week has heightened concerns about a potential strike at the world's largest memory chipmaker.
Strike details
Potential disruption to production and customer commitments
The union has confirmed its plan for an 18-day strike starting May 21, despite being open to new talks after June 7. Analysts have warned that this could disrupt production at the chipmaker and affect Samsung's ability to meet customer commitments. Ryu Young-ho, a senior analyst at NH Investment & Securities, said there appear to be rising concerns over delivery reliability if the strike takes place and sentiment that rivals could benefit from the uncertainty.
Mediation efforts
Labor commission urges parties to hold another round of talks
The South Korean Labor Commission has urged both parties to hold another round of government-mediated talks on Saturday in a bid to avert the strike. The union has said it will only engage in talks if the company submits a detailed proposal addressing its demands by 0100 GMT on Friday. Meanwhile, Samsung Electronics has confirmed its offer for unconditional talks but did not comment further.
Economic concerns
Samsung strike could pose major risks to economic growth
The union, unhappy over a perceived bonus pay gap with rival chipmaker SK Hynix, has warned that over 50,000 workers could join the strike next week. South Korean government officials have warned that a Samsung strike could pose major risks to economic growth, exports and financial markets. JPMorgan has estimated the production impact of such a strike could be higher than previously expected, with potential losses to Samsung's operating profit ranging from $14 billion to $21 billion.