Samsung Electronics strike could cost billions, South Korea warns

South Korea said on Sunday it is prepared to use all available measures, including emergency arbitration, to prevent a labor strike at Samsung Electronics, warning that even a brief shutdown could inflict major economic damage.

Prime Minister Kim Min-seok said a one-day suspension at Samsung’s semiconductor plants could result in direct losses of up to KRW 1 trillion ($667.7 million).

He added that prolonged disruptions could have far-reaching consequences, with total economic losses potentially reaching 100 trillion won if chip materials are discarded and production remains halted for months.

The world’s largest memory chip maker and its South Korean labor union are set to resume wage negotiations on Monday with the assistance of a government mediator. The talks are seen as a key effort to avert a strike that could disrupt one of the country’s most important industries.

Emergency arbitration, which can be ordered by the labor minister if a dispute is deemed harmful to the economy or public life, would ban industrial action for 30 days while the National Labor Relations Commission oversees mediation. The measure has been used only rarely and would mark an extraordinary step by the government.

The union said it would participate in negotiations in good faith in hopes of reaching a deal with management.

Samsung plays a central role in South Korea’s economy, accounting for 22.8% of the nation’s exports and 26% of the domestic stock market, according to the prime minister. The company employs more than 120,000 people and works with around 1,700 suppliers across the country.