From chips to shipyards, unions push aggressive profit-sharing demands, fueling anxiety over wider labor unrest The photo shows Samsung Electronics’ headquarters in Suwon, Gyeonggi Province, on Monday morning. (Im Se-jun/The Korea Herald) South Korea’s industrial backbone is facing its most serious wave of labor unrest in years, raising fears of disruptions to global technology and automotive supply chains at a critical moment for the economy.At the center of the tensions is Samsung Electronics, where workers are preparing for an unprecedented 18-day strike beginning Thursday.The company’s largest labor union is demanding the removal of the current cap on performance bonuses and a new system that would allocate up to 15 percent of operating profit to employees. Based on industry estimates that Samsung could generate 300 trillion won ($199 billion) in annual operating profit this year, the proposed formula could result in bonus payouts of up to 45 trillion won.Samsung management opposes institutionalizing such a structure, arguing that fixed, uncapped profit-sharing could undermine long-term investment capacity in the highly cyclical semiconductor industry, which requires flexible financial management and massive capital expenditure.Samsung Electronics and the union were holding government-led mediation talks Tuesday in a last-ditch effort to avert what could become the largest strike in the history of the world’s biggest memory chipmaker. The union has warned that more than 50,000 workers could participate if negotiations fail.Industry observers say the outcome of Samsung’s negotiations could become a watershed moment for labor-management relations across Korea Inc.“Other companies and labor unions are watching closely,” said Hwang Yong-sik, a professor of business administration at Sejong University. “Once Samsung establishes a precedent, it could effectively become the standard and reference point for other industries.”Hwang warned that if Samsung’s union succeeds in institutionalizing a profit-sharing structure tied directly to operating profit, “the ripple effects across South Korean industry could be enormous.”Rippling across Korea Inc.Concerns are spreading well beyond Samsung. Unions at Hyundai Motor, HD Hyundai Heavy Industries, Hanwha Ocean and tech companies such as Kakao are ramping up collective actions with aggressive demands for higher wages and bonuses.Labor unions at Hyundai Motor and Kia recently submitted wage demands that include bonuses equivalent to 30 percent of net profit. Unions at HD Hyundai Heavy Industries are seeking bonuses worth at least 30 percent of operating profit following the shipbuilder’s record earnings.Workers at Hanwha Ocean, Samsung Biologics, LG Uplus and Kakao have also stepped up calls for compensation systems more directly tied to company performance.Industry officials warn that formalizing fixed payout structures linked to operating profit could weaken companies’ ability to sustain investment during downturns, especially in capital-intensive sectors such as semiconductors.The concerns are even more acute for smaller suppliers and subcontractors, which operate on far thinner margins than major conglomerates.“If fixed-ratio bonus systems become normalized at large corporations, smaller firms will also face pressure from workers demanding similar arrangements despite lacking the financial capacity to absorb them,” an industry official said.Anxieties have intensified further following revisions to labor laws commonly referred to as the “Yellow Envelope Law,” which expanded protections for union activities and broadened collective bargaining rights for subcontractors.Critics argue the changes could accelerate labor disputes across subcontracting networks and industrial supply chains.“Subcontractors will inevitably demand treatment similar to that of the main contractors,” Hwang said. “Parent companies will increasingly be drawn into negotiations they previously could avoid.”The escalating labor tensions come at a particularly delicate moment for South Korea’s export-driven economy, which is already facing intensifying competition from Chinese rivals across key industries, including semiconductors, electric vehicles, shipbuilding and batteries.Industry officials warn that prolonged labor instability could further accelerate the shift of investment and production overseas, as Korean companies continue expanding manufacturing operations across the US, Southeast Asia and Europe to manage geopolitical and operational risks.