Samsung Biologics (207940.KS) labor and management have agreed to end their wage and collective bargaining agreement standoff that has dragged on for more than 100 days, seeking a resolution within the year through a post-adjustment procedure. Both sides have formally submitted a post-adjustment application to the Incheon Regional Labor Relations Commission and will enter intensive mediation over the next one to two months.
Post-adjustment is a mechanism whereby the labor relations commission re-enters arbitration with mutual consent from both parties when a dispute remains protracted even after the formal labor dispute adjustment process has concluded. The agreement was reportedly reached after the company first proposed the measure and the union accepted it.
The shared judgment that both sides must avoid a “war with no winners” underpins their mutual step back from confrontation. The company is grappling with strike-related production disruption losses that will be fully reflected in earnings starting in Q3, while the union faces the dual burden of public criticism over excessive demands and the potential curtailment of its right to strike depending on pending court rulings.
Earnings Headwinds and an Order Cliff Drive Management to Seek an Exit
Samsung Biologics posted record quarterly results in Q2, with consolidated revenue of ₩1.32 trillion (approximately $937.2 million) and operating profit of ₩586.4 billion (approximately $416.1 million), driven by full-capacity operations across Plants 1 through 4 and favorable exchange rates. Revenue rose 30% and operating profit climbed 23% year over year.
However, starting in Q3, approximately ₩150 billion (approximately $106.4 million) in production disruption losses from the April–May strikes will be reflected in the company’s accounts. Compounding the issue is a sharp slowdown in new orders, heightening concerns over the earnings outlook. Samsung Biologics’ only new order this year is a ₩279.6 billion (approximately $198.4 million) contract signed with a European pharmaceutical company in March. Compared with the first half of last year, the number of new contracts has fallen to one-fifth and total contract value to one-twelfth.
CategoryH1 2025H1 2026Number of contracts51Contract value₩3.35 trillion₩279.6 billion
Note: H1 2026 orders consist solely of the March contract with a European pharmaceutical company.
Reflecting this order slowdown, Korea Investment & Securities recently lowered its target price for Samsung Biologics from ₩2.23 million to ₩1.95 million. Analysts note that with intensifying competition in the global CDMO (contract development and manufacturing organization) business, the erosion of the first half by wage negotiations and strike issues is weighing negatively on both earnings and share price prospects.
Union’s Burden: Excessive Demands and Constraints on Strike Rights
The union also appears to have concluded that playing the card of a second full-scale strike would yield little practical benefit. The union has demanded a 14.3% base salary increase, a ₩30 million (approximately $21,286) incentive payment, and performance bonuses equivalent to 15% of operating profit. While the union lowered its performance bonus demand from an initial 20% of operating profit to 15%, the gap with management’s offer of a 6.2% base salary increase and a ₩6 million (approximately $4,257) one-time payment remains wide.
Even Samsung Electronics’ DS division, which enjoyed a semiconductor super-boom, set its special management performance bonus pool at 10.5% of operating profit, making the union’s 15% demand a lightning rod for public criticism. Additionally, the appellate ruling on the injunction prohibiting strike action pending in court has been delayed longer than expected, further increasing pressure on the union. If the court rules in the company’s favor, the scope of the union’s strike actions could be significantly curtailed.
Remaining Sticking Points: Wage Increase Rate and Managerial Prerogative Clauses
In the full-fledged post-adjustment phase, the key challenge will be narrowing differences over the wage increase rate and the union’s demands for clauses that management views as encroaching on managerial prerogatives. Beyond wage increases, the union is demanding prior notification and labor-management prior consent for major investment and business decisions, including domestic and international M&A, spin-offs, plant sales, business unit consolidation or restructuring, and the establishment of new legal entities.
The union is also strongly demanding that prior union consent on overall HR policy operations—including hiring and promotions—be stipulated as a collective bargaining agenda item. These demands emerged following an internal personnel information leak incident last November, with the union citing transparency in HR operations as its rationale.
Management and the business community have drawn a firm line, arguing that investment and HR/hiring authority falls squarely within inherent managerial prerogatives and constitutes clear overreach. The company has countered by proposing coordination through a third-party external expert body as an alternative.
Business Expansion Drive and the Urgency of Resolving Labor Risk
Amid the labor-management conflict, Samsung Biologics is accelerating its global expansion and portfolio diversification. The company plans to open a European sales office in Amsterdam, Netherlands, during Q3, completing a global client-facing network that already includes offices in New Jersey, USA, and Tokyo, Japan. Additionally, the company has finalized its entry into the peptide CDMO market—a key raw material for obesity and diabetes treatments—through the approximately ₩2.7 trillion (approximately $1.9 billion) acquisition of Switzerland’s Polypeptide Group.
An industry source noted, “With major business expansion milestones ahead—including full-scale revenue from the Rockville, Maryland plant, Plant 5 operations, and expanded global order hubs—early resolution of labor risk and restoration of customer trust are more urgent than ever.” A Samsung Biologics representative stated, “The company will continue to engage in negotiations in good faith.”