Seoul: Samsung Electronics Co. and its largest labor union have resumed government-led wage mediation, facing the possibility of reaching a last-minute agreement to prevent a strike at the world's largest memory chipmaker.

According to Yonhap News Agency, the negotiations resumed just days after the initial mediation ended without a resolution. The two parties remain divided over performance-based bonuses, with an 18-day strike scheduled to start on Thursday. Park Soo-keun, chairman of the National Labor Relations Commission, noted that despite ongoing disagreements, there is still a chance for both sides to come to terms.

Park stated, "Both labor and management are making concessions," but highlighted that a few key issues remain unresolved. The core of the dispute lies in the allocation of performance-based bonuses tied to the tech giant's earnings from its AI-related semiconductor business, a contentious point in the current global memory supercycle.

Samsung has suggested maintaining the existing excess profit incentive system, with bonuses calculated as 10 percent of operating profit. The company also proposed a special compensation system to introduce a more flexible incentive structure. In contrast, the union demands fixed performance bonuses equivalent to 15 percent of the semiconductor division's operating profit and the removal of payout caps.

Disagreements persist regarding the distribution of performance bonuses to other loss-making business units. Industry sources indicate that the union has suggested a 70/30 split of the semiconductor bonus pool, with 70 percent shared across the entire division and 30 percent based on business unit performance. Management, on the other hand, contends that this system would reward loss-making units and weaken performance-based incentives, advocating for a lower overall allocation to such payouts.

In the first quarter of this year, Samsung Electronics' chip division reported a record operating profit of 53.7 trillion won (US$35.8 billion). While the memory business is believed to have been highly profitable, non-memory units likely posted losses. Industry observers warn that a strike could have severe economic repercussions, potentially costing the South Korean economy up to 100 trillion won due to its reliance on semiconductor exports.