Choi Seung-ho, head of Samsung Electronics' largest labor union, talks to reporters at the National Labor Relations Commission office in Sejong City, Monday. Yonhap

Samsung Electronics and its largest labor union resumed government-led wage mediation talks Monday in a last-ditch effort to avert a strike at the world's largest memory chipmaker.

The talks restarted days after the first round of government-mediated negotiations collapsed over performance-based bonuses, ahead of an 18-day strike scheduled to begin Thursday.

"We will participate in this second round in good faith," Choi Seung-ho, head of Samsung Electronics' largest labor union, told reporters at the National Labor Relations Commission office in Sejong, about 110 kilometers south of Seoul.

No deadline has been set for the second round of mediation. However, with only three days remaining before the union's planned strike, it is widely viewed as the final opportunity for a breakthrough.

Labor and management remained sharply divided over performance-based bonuses tied to earnings from the company's artificial intelligence (AI)-related semiconductor business amid the ongoing memory supercycle.

Management has proposed maintaining the current excess profit incentive system while allowing the bonus pool to be calculated based on either 10 percent of operating profit or economic value added, known as EVA. The company also proposed introducing a special compensation system, saying it would help create a more flexible incentive structure.

The union, however, is demanding fixed performance bonuses equal to 15 percent of the semiconductor division's operating profit and the removal of payout caps.

Industry observers say if a walkout occurs, losses to the South Korean economy can reach up to 100 trillion won ($66.7 billion), given the country's heavy reliance on semiconductor exports.

Government officials have raised concern over the strike, suggesting Seoul may invoke emergency arbitration powers to prevent the strike. This has prompted backlash from labor groups.

Source: Korea Times News