Samsung Elec union threatens to walk out of pay talks if no mediation proposal

SEOUL, May 12 (Reuters) – Samsung Electronics’ labour union in South Korea said on Tuesday it would walk out of ongoing pay negotiations if no mediation proposal was offered within two hours.

The two sides have so far been unable to narrow their differences after marathon discussions under the government-mediated process.

The company is sticking to its proposal of assigning 10% of operating profit to a performance bonus pool, union representative Choi Seung-ho told reporters.

He said it has been waiting for a mediation proposal for three hours.

Samsung was not immediately available for comment.

The union has demanded the company commit 15% of operating profit to a performance bonus pool, scrap a cap on bonus pay currently set at 50% of annual base salary, and keep such changes in place beyond this year.

Samsung workers have been angered by what they call a massive gap in bonus pay with rival SK Hynix, which beat Samsung in delivering high bandwidth memory for artificial intelligence chip units to Nvidia following the release of ChatGPT in late 2022.

SK Hynix last year abolished its pay cap, resulting in bonuses more than three times higher than those offered to Samsung workers, sparking a surge in Samsung union membership.

Employees’ frustration has been exacerbated by Samsung’s record profits as the AI boom drives up demand for chips. Samsung last week became only the second Asian company after TSMC to have a market capitalisation of more than $1 ⁠trillion.

(Reporting by Hyunjoo Jin. Editing by Louise Heavens and Mark Potter)