Samsung Electronics is facing growing uncertainty after its South Korean labour union reaffirmed plans to proceed with a large-scale strike despite the company’s offer to restart negotiations.

The union announced on Friday that workers still intend to begin an 18-day strike on May 21, even as Samsung proposed resuming pay talks without preconditions.

The dispute centers primarily on compensation issues, including wages and bonus structures, with union members arguing that Samsung workers are receiving significantly less favorable bonus payouts compared with rival semiconductor companies.

Government-mediated negotiations between the two sides collapsed earlier this week, increasing concerns that the strike could materially disrupt operations at one of the world’s largest semiconductor manufacturers.

Shares Fall as Investors Weigh Production Risks

Investor sentiment weakened sharply following the latest developments.

Samsung shares fell as much as 5.9% during trading before partially recovering, while still underperforming the broader South Korean market.

Analysts attributed the decline to rising fears that labour disruptions could affect production schedules, customer deliveries, and Samsung’s competitiveness in the global memory chip market.

According to NH Investment & Securities analyst Ryu Young-ho, markets are becoming increasingly concerned about delivery reliability if the strike proceeds, especially given growing demand across the semiconductor and artificial intelligence sectors.

There is also rising speculation that competitors could benefit if Samsung experiences supply disruptions during a critical period for global chip demand.

Memory Chip Industry Faces Additional Pressure

The timing of the labour dispute comes as the semiconductor sector is already navigating intense competition and accelerating AI-related demand growth.

Samsung remains one of the world’s largest producers of DRAM and NAND memory chips, products viewed as critical components for artificial intelligence infrastructure, cloud computing, smartphones, and data centers.

At the same time, rivals such as SK Hynix have gained momentum in high-bandwidth memory products used in advanced AI systems.

The prospect of production instability at Samsung could therefore carry broader implications for global memory supply chains and pricing dynamics.

Potential Financial Impact Could Be Significant

Financial analysts are increasingly warning that the economic consequences of a strike could become substantial if worker participation expands.

According to estimates from JPMorgan Chase & Co., Samsung’s operating profit could face an impact ranging between 21 trillion won and 31 trillion won, equivalent to roughly $14 billion to $21 billion.

The bank also estimated potential sales losses of approximately 4.5 trillion won if production disruptions intensify.

These projections are significantly higher than earlier expectations because of concerns that more workers may participate in the strike than initially anticipated.

Government Officials Push for Resolution

South Korean government officials have become increasingly vocal about the importance of avoiding a prolonged labour disruption at Samsung.

Industry Minister Kim Jung-kwan warned that a strike could cause severe economic damage given Samsung’s central role in South Korea’s exports, technology sector, and broader economy.

The South Korean Labour Commission has reportedly urged both sides to participate in another round of government-mediated negotiations in an effort to avoid the planned strike.

Some officials have even raised the possibility of emergency arbitration if negotiations fail completely, though such action would require formal approval from the labour ministry.

Union Remains Firm on Demands

Despite Samsung’s offer to restart talks without conditions, union leaders said the company has not yet presented sufficiently detailed proposals addressing key worker concerns.

The union has indicated willingness to resume negotiations after June 7 while still maintaining its strike schedule.

Labour representatives have also highlighted frustration over what they describe as a widening compensation gap between Samsung employees and workers at rival firms benefiting more directly from the AI-driven semiconductor boom.

The union has warned that more than 50,000 workers could participate in the strike if an agreement is not reached.

AI Boom Raises Stakes for Semiconductor Industry

The dispute arrives during one of the most important periods for the semiconductor industry in years.

Global demand for AI infrastructure, memory chips, and advanced computing hardware has accelerated rapidly as companies expand artificial intelligence investments worldwide.

Samsung’s ability to maintain stable production and fulfill customer orders remains especially important as hyperscalers, cloud providers, and AI developers continue ramping up spending on advanced semiconductors.

Markets will now closely monitor whether renewed negotiations this weekend can reduce tensions before the planned strike begins next week.