Samsung Electronics and its labor union began high-stakes talks on Monday. The goal is to avert the largest strike in the tech giant’s history. Over 45,000 workers could walk out.

The threatened 18-day strike starts on Thursday. It comes amid a global shortage of memory chips. These chips are essential for AI data centers, smartphones, and laptops.

Economic and Supply Chain Concerns

The negotiations follow the collapse of a first round of government-mediated talks. These talks concerned base pay and performance bonuses. The stakes are exceptionally high. Samsung is the world’s largest memory chipmaker.

The company accounts for nearly a quarter of South Korea’s total export volume. A prolonged walkout could severely damage the nation’s macroeconomic stability. It could also disrupt vital global technology supply chains.

Court Ruling Adds Pressure

A South Korean court partially granted Samsung’s request for an injunction. It ordered the union to ensure any strike does not disrupt production. The ruling mandates that a strike must not degrade materials used in production.

Operations related to safety and avoiding product damage must be maintained at normal levels. Non-compliance could result in hefty fines. The two main unions could face fines of 100 million won ($72,000) per day each. Union leaders could be fined 10 million won per day.

Market Reaction and Government Concerns

Samsung Electronics shares rose as much as 6.7% in morning trade after the court’s ruling. This significantly outstripped a broader 1.4% rise in the benchmark KOSPI index.

South Korean government officials have voiced profound worries about the impending strike. They warn it could pose significant risks to economic growth, exports, and financial markets.

President’s Stance on Labor and Management Rights

President Lee Jae Myung emphasized the need for a balanced approach. He stated that management rights should be respected as much as labor rights. Lee highlighted the importance of fair compensation for workers.

He also stressed the need for shareholders to bear risks. This balanced approach is crucial in South Korea’s liberal democratic order and capitalist market economy.

Union’s Commitment to Negotiations

The union pledged to engage seriously in negotiations despite the court ruling. It stated that the ruling would not dissuade it from pursuing a strike if talks fail to achieve a deal.

Samsung Electronics declined to comment on the ongoing legal strategy. Union representatives were not immediately available for comment prior to the meeting.

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