Samsung Electronics’ biggest labour union is threatening to strike at the height of the global AI chip boom, turning a fight over bonuses into a test of how the industry’s windfall profits should be shared and sparking fears of an economic slowdown in South Korea.

The union has warned it will stage an 18-day walkout from May 21 to June 7, raising concerns about production disruptions, customer defections and wider fallout across the global technology supply chain.

The dispute comes as demand for artificial intelligence infrastructure has driven record profits at South Korean chipmakers, while intensifying pressure on Samsung to defend its leading position in the memory semiconductor market.

Samsung Electronics and union representatives failed to reach an agreement on Wednesday after two days of government-led mediation talks, which were widely viewed as a last-ditch effort to avert a strike.

The company expressed regret over the collapse of negotiations and said it hoped to continue “sincere dialogue” with the union.

Union leaders, however, said they would not return to the negotiating table until after the planned strike unless Samsung Electronics made significant concessions.

However, the company argued that allocating a fixed proportion of operating profits to employee bonuses could weaken its ability to invest during future downturns in the notoriously cyclical semiconductor industry.