Samsung Electronics' union plans for 48,000 workers to walk off the job on Thursday (21 May) after efforts to clinch a deal on bonus payments fell through, threatening the health of South Korea's economy and the global supply of semiconductors.
Union leader Choi Seung-ho said that the 18-day strike would go ahead as management had not come round on one remaining sticking point in talks mediated by the government.
"I want to make clear that we had accepted the final proposal presented by government mediator," he told reporters.
"We express deep regret and feel disappointed but the union plans to go ahead with the strike according to the law," Choi said.
Samsung Electronics said in a statement that the union had insisted on "unacceptable demands" that included the size of bonuses for loss-making units.
"The reason an agreement could not be reached .... is that accepting the labor union's excessive demands would undermine the fundamental principles of company management," it said.
Its shares were down about 3% after the news.
South Korea's government threatened at the weekend to step in and order emergency arbitration, citing the adverse impact the strike could have on the economy.
The measure, which has been rarely employed, would prevent the strike from going ahead for 30 days while the government mediates talks.
But a South Korean government official said on Wednesday that talk of emergency arbitration is premature and that there was still time for dialogue.
South Korea's labour commissioner Park Soo-keun, who mediated the talks, said that the government is open to restarting the mediation process "anytime".
Samsung accounts for almost a quarter of the country's exports. It is also the world's largest memory chip maker and production disruptions could dent global supply at a time when the artificial intelligence (AI) boom has caused shortages.
The union had demanded that Samsung abolish a cap on bonuses that stands at 50% of annual salaries, allocate 15% of annual operating profit to bonuses and that these changes be formalised beyond one year.
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