The largest union at Samsung Electronics Co said it will stage a three-day walkout beginning July 8, adding to the challenges for South Korea’s largest company as it seeks to recover from setbacks in its semiconductor business.

The National Samsung Electronics Union, the largest of the tech giant’s several unions with some 28,400 workers, announced the decision Monday (July 1) evening after the latest wage negotiations failed to yield breakthroughs. The two sides had resumed talks on June 13 after some union workers took a single day off on June 7, the first strike in the company’s 55-year history. 

Samsung Electronics had long avoided the kind of labour turmoil that plagued many of Korea’s leading companies, including violent episodes at its automakers. The current disputes at the technology powerhouse haven’t disrupted operations but signal a new uncertain time for its workplace culture.

Samsung’s shares stood largely unchanged in Tuesday's trading in Seoul. While investors don’t appear concerned for now, analysts said a rare walkout at Korea’s biggest company could prompt similar action within its industry - or beyond. Depending on how many workers in the key semiconductor division join the walkout, the action could hamper production at the world’s leading memory chipmaker or set new standards for the sector.

“This strike could also trigger broader labour actions across South Korea. Other key companies might see increased union activities or even strikes, indicating a potential domino effect within the industry,” said Billy Leung, an investment strategist at Global X ETFs in Sydney. “The outcome of Samsung’s labour negotiations could set a precedent for the tech industry, influencing market dynamics and investment strategies in the semiconductor sector.”

The union’s latest decision came after management didn’t accept the union’s demand for additional paid leave and a higher wage hike for 855 workers who didn’t agree to a 3% annual basic pay increase, Lee Hyun-kuk, deputy secretary general of the union, told Bloomberg News. The union leaders met with Jun Young Hyun, the new head of Samsung’s semiconductor division, for the first time Monday afternoon.

It’s unclear how many workers will participate in the three-day walkout, but the union will encourage its members to join the effort, Lee said.

The company has historically set pay increases through a council consisting of representatives from both sides, and in March that labour-management council agreed to increase this year’s pay by 5.1%, representing a 3% basic pay increase and a 2.1% performance raise. But that agreement was later called off because of differences over paid leave and bonus payments.

  - Bloomberg