Seoul: Samsung Electronics Co.'s labor union announced on Friday that it will resume negotiations with management next week after initial talks regarding bonuses broke down. The announcement comes amid threats from unionized workers to go on strike later this month.

According to Yonhap News Agency, the tech giant's largest labor union plans to enter follow-up mediation procedures on Monday and Tuesday. This follows the government's request to continue negotiations with management to address outstanding issues. The union previously announced plans for an 18-day general strike from May 21 if demands for higher performance-based bonuses are not met. Choi Seung-ho, head of the main labor union, cautioned that the union would proceed with the walkout if talks fail to yield satisfactory results.

The decision to revisit discussions is the outcome of consultations between the labor union, government mediators, and management. The government strongly recommended follow-up mediation, a process conducted after the formal labor dispute adjustment ends, allowing the union to secure the legal basis for a strike. Wage negotiations between management and the labor union have been ongoing since December, but talks collapsed in March due to unresolved differences over performance-based bonuses.

The labor dispute at Samsung Electronics, the world's largest memory chip maker and South Korea's most valuable company, has sparked concerns about potential disruptions to production, the semiconductor supply chain, and the broader economy. Estimates suggest that the South Korean tech giant could face losses of up to 30 trillion won (US$20.3 billion) if the strike occurs. Last month, Samsung Electronics reported an operating profit of 57.23 trillion won for the first quarter, a significant increase from 6.68 trillion won a year earlier, driven by strong demand for high-end memory chips used in artificial intelligence applications.