Samsung workers are preparing to strike at the worst possible time

More than 47,000 workers at Samsung Electronics are preparing for an 18-day strike after bonus pay negotiations between the company and its union collapsed. The strike is scheduled to begin on Thursday and will be limited to local Samsung chipmaking plants, raising concerns about already limited production of memory chips amid ongoing shortages.

While the union agreed to mediation proposed by South Korea’s National Labor Relations Commission (the details of which were not made public), management at Samsung Electronics rejected the deal without explanation. Nikki Asia Reports.

As part of its demands, the Samsung union is seeking performance bonuses equivalent to 15% of the company’s operating profits, and removing the maximum bonus limit of 50% of annual wages. The collapse of the negotiations comes at a time when Samsung recorded record profits after establishing its position as the largest producer of memory chips in the world.

South Korean government officials had urged both Samsung and the labor union to reach an agreement in the days leading up to the strike, with Prime Minister Kim Min-seok warning that the government might intervene and prevent the strike from going ahead. South Korean law allows the “emergency amendment” to be activated when conflicts harm the economy or daily life. Samsung is the largest company in South Korea, responsible for about 23% of the country’s exports and 26% of its total market value, according to CNBC.