Dispute over bonus distribution derails last-minute talks as union prepares walkout involving more than 50,000 workers Members of Samsung Electronics' labor union gather for a rally at the tech giant's Pyeongtaek campus in Gyeonggi Province on April 23. (Newsis) Samsung Electronics’ labor union said Wednesday it will proceed with a strike Thursday, escalating a wage dispute that has raised concerns over potential fallout for Korea’s economy and semiconductor industry.The National Labor Relations Commission said its second round of mediation between Samsung Electronics and the union ended without an agreement despite a proposal presented earlier in the day.According to the commission, the union accepted the proposal, but Samsung Electronics withheld approval, saying it needed more time to review the terms.Some industry watchers have warned that losses from a prolonged strike at Samsung Electronics could reach as high as 100 trillion won ($67 billion).The Samsung Electronics Labor Union blamed management for failing to make a final decision before the talks ended. It expects over 50,000 members to participate in the walkout.“The union will begin its strike Thursday as planned,” the union said in a statement. “Even during the strike, we will continue efforts to reach an agreement.”According to the union, Samsung Electronics initially rejected the commission’s proposal, later withdrew the rejection and requested additional time before the mediation process ultimately broke down.“We deeply regret that the post-mediation process ended because of delayed decision-making by management,” the union said.Choi Seung-ho told reporters the union remains willing to return to mediation if further talks are arranged.Samsung Electronics also expressed regret over the collapse of the talks, but said the union’s demands had gone beyond what the company could accept.“A strike must be avoided at all costs,” the company said in a statement. “The company will not give up dialogue until the last moment to prevent the worst-case scenario.”Samsung said it had accepted most of the union’s demands regarding the size and structure of performance bonuses, but could not agree to what it described as excessive compensation for employees in loss-making divisions.Despite narrowing differences on major issues such as OPI bonus caps and a special incentive system, the talks ultimately collapsed over how to divide the bonus pool across business units.According to industry sources, the union demanded that 70 percent of the pool be distributed equally across divisions and 30 percent tied to business-unit performance. Such a structure would guarantee sizable bonuses even for loss-making divisions such as Foundry and System LSI, where many union members are concentrated.Samsung reportedly favors performance-based distribution, pushing for a 40:60 split , arguing that overly narrowing the gap between profitable and loss-making divisions could undermine its long-standing performance-based culture and weaken accountability.The company said the proposal conflicted with its principle that compensation should reflect performance.“If the company gives up the principle that compensation should be based on performance, it could have negative effects not only on Samsung Electronics but also on other companies and industries,” the company said.Still, Samsung said it would continue efforts to reach a settlement through additional mediation or direct talks.The Labor Ministry also left open the possibility of further negotiations while saying it was premature to discuss emergency intervention measures.A ministry official said during an emergency briefing Wednesday that the collapse of the second mediation round was “very regrettable,” but added that there was still time for the two sides to continue negotiations before the strike begins.“Under the principle that labor disputes should be resolved through dialogue between the parties, the government will provide maximum support, regardless of format, so that the issue can be settled through autonomous negotiations,” the official said.Emergency arbitration would allow the government to order a halt to industrial action and directly intervene in the dispute.The NLRC also said it remained ready to resume mediation at any time if both parties request further talks.“We are ready to resume mediation at any time, even at night or during a holiday,” an NLRC official said. “The gap has narrowed considerably.”