May 21, 2026 /SemiMedia/ — Samsung Electronics and its labor union reached a tentative agreement just one hour before a planned large-scale strike was set to begin, temporarily easing concerns over disruptions to global semiconductor supply chains.

The labor dispute, which had continued for months, centered on wages and performance compensation for employees, particularly within Samsung’s semiconductor business. Earlier on May 20, negotiations had collapsed again, and the union announced plans to proceed with a full-scale strike beginning May 21.

However, discussions resumed later in the evening after intervention from South Korea’s labor ministry, leading to a last-minute breakthrough.

South Korean President Lee Jae-myung also weighed into the dispute publicly, criticizing some of the union’s demands as excessive. Lee argued that operating profits should primarily reward investors rather than be distributed automatically to employees before taxes and other obligations are accounted for.

The potential strike had raised serious concerns across the semiconductor industry because Samsung Electronics is one of the world’s largest memory chip manufacturers. Analysts previously warned that a prolonged shutdown could disrupt DRAM and HBM supply chains while creating significant economic losses for South Korea.

Under the tentative agreement, Samsung Electronics will maintain its existing year-end bonus system while introducing a new special incentive structure for the Device Solutions (DS) division, which oversees semiconductor operations.

The new incentive program will become active once operating profit exceeds specific thresholds, with 10.5% of performance-related earnings allocated as the funding source. Compensation will be distributed in stock form over a 10-year period without an upper limit.

According to the proposed structure, 40% of the incentive pool will be distributed evenly across the DS division, while the remaining 60% will be allocated based on business unit performance.

Industry estimates cited by Yonhap News suggest employees in Samsung’s memory chip division could receive average bonuses of about 600 million won this year under the agreement.

Samsung also agreed to raise average salaries by 6.2% this year and expand childcare subsidies and housing loan benefits.

Union members are scheduled to vote on the agreement between May 22 and May 27. The deal will take effect if more than half of participating members approve the proposal.