(Bloomberg) -- Samsung Electronics Co.’s labor union said it plans to carry out its first strike ever, 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 about 28,000 workers, announced the decision Wednesday after wage negotiations with management stalled. The two sides have been in discussions since the start of this year but have failed to resolve their differences. 

“What we want is not a 1-2% wage increase. What we want is to be paid fairly for the amount of work done,” the union said in a statement in front of Samsung’s offices in Seoul. “We want to be compensated for our labor fairly and transparently.”

The union’s decision comes as Samsung, led by Executive Chairman Jay Y. Lee, finds itself in the unusual position of playing catchup in a key sector of the chips industry. Local rival SK Hynix Inc. has jumped out to an early lead in the memory chips that are used for the development of artificial intelligence services, a booming sector of the business. 

Samsung shares fell as much as 3.1% after the strike was reported, taking their loss since an April peak to more than 10%.

“The company remains committed to engaging in good faith negotiations with the unions, and is making every sincere effort to an agreement,” Samsung said in a statement.

It’s unclear how the union action will affect Samsung’s business. Some of the union workers plan to skip work on June 7. Union leaders say they have estimated the number of workers who will participate internally but declined to specify the figure.

They have plans for a subsequent strike if management declines to engage in talks, but wouldn’t reveal the date.

The first strike day is a Friday, between a Thursday holiday and the weekend, so the absences will let workers take an extended break. Union leaders don’t expect a significant impact to production lines for chips and other electronics since much of the operation is automated and Samsung has an extensive workforce.

The union wants top management, including Lee, to take their views more seriously. The heir of the company’s founding family pledged in 2020 to end its past practices of suppressing organized labor activities.

“Despite Chairman Jay Y. Lee’s declaration that non-union management will be eliminated, there is no change in the management’s attitude,” the union said. “We can no longer stand by the company’s lack of will to negotiate.”

Son Woo-mok, head of the union, said that one of the key issues in negotiations is bonus payments. In March, Samsung’s labor-management council decided to increase this year’s pay by 5.1%. 

South Korea has been working to contain inflation in recent months, like many other countries. Korea’s inflation slowed more than expected in April, with consumer prices rising 2.9%.

Unionized workers have drawn a public backlash after holding a concert-like rally with performances by celebrities in Seoul last week. Samsung Electronics has not had a strike since its founding in 1969.

--With assistance from Vlad Savov and Shinhye Kang.

(Updates with company comment from sixth paragraph)

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