Shares of Samsung Electronics rose as much as 7% to their day’s high of Korean Won 2,88,500 after the company entered crucial wage negotiations with its largest labour union in an effort to avoid a strike that could disrupt operations at the world’s biggest memory chipmaker.As a result, the KOSPI gained more than 1%. According to MSCI data, Samsung Electronics carries a weight of 32% in the index, followed by SK Hynix at 22%, making movements in the two stocks highly influential for the benchmark. In the previous session, Samsung shares had slumped more than 8%, dragging the Kospi down 6%.Concerns over a major disruption to South Korea’s semiconductor industry eased after efforts by political and corporate leaders to calm tensions between the two sides. Adding to the relief, a Korean court on Monday partially approved an injunction against potential illegal actions by the labour union, according to Yonhap News. Samsung shares climbed as much as 6.7% in Seoul, reversing almost all losses of the previous session.The development gains significance as any production disruption at Samsung could have broad implications for the global technology supply chain. The company is the world’s largest supplier of memory chips used in products ranging from data centre servers and smartphones to electric vehicles. The negotiations also highlighted growing labour tensions in South Korea as workers seek a larger share of profits generated by companies such as Samsung and SK Hynix amid the global boom in artificial intelligence infrastructure.Union leaders and company executives resumed government-mediated negotiations on Monday for a second round of talks. The meeting came after days of rising tensions and failed mediation attempts that had raised investor concerns over possible walkouts at Samsung’s semiconductor facilities in Korea. The union has threatened to begin an 18-day strike from May 21 if its demands are not addressed.Over the weekend, South Korean Prime Minister Kim Min-Seok urged both sides to resolve the dispute through dialogue. Samsung Executive Chairman Jay Y. Lee also made a rare public appeal, referring to union members as “one family.” The company additionally agreed to the union’s request to replace its lead negotiator with the head of the chip division’s people’s team.“We will sincerely engage in talks,” Samsung union leader Choi Seung-ho said, according to a Bloomberg report. The union has been pressing Samsung to increase performance-linked compensation after a sharp recovery in semiconductor earnings fueled by strong demand for AI infrastructure. Labour representatives are demanding that Samsung remove the existing cap on bonuses, allocate 15% of operating profit toward employee bonuses and formally include those terms in employment contracts.Samsung has proposed allocating 10% of operating profit to bonuses along with a one-time special compensation package that it said exceeds industry standards. Company executives have argued that the union’s demands may not be sustainable over the long term.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)