Advocacy groups have claimed harmful chemicals used in the manufacturing of chips have caused cancer in hundreds of Samsung employees.
The South Korea-based technology giant has staunchly denied it created dangerous working conditions at is factories, after a study by U.S. scientific consultancy firm Environ International in 2011 found exposure to harmful chemicals to be very low.
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Despite this, Samsung has come under increasing pressure to take action to compensate victims. Government opposition lawmaker Sim Sang-jung, along with lobby groups representing victims, called for Samsung to apologize to the employees.
On Wednesday, the tech giant said it had listened to Sim's proposals and would compensate those affected and their families.
"We could have been more diligent in addressing the hardship and sorrow of former employees and the families of the deceased," Samsung told CNBC in an emailed statement.
"We wholeheartedly accept the proposal and will make due compensation for former employees battling illness and the families of the deceased. In accordance to the proposal, all parties will discuss the set up of an impartial independent mediating group."
Advocacy group Banollim claimed 243 Samsung employees that worked at the plants contacted leukaemia or other cancers, and 92 have died. Only three of the cases were officially deemed to be work related.
The issue came to light in 2007 after former Samsung worker Hwang Yu-mi died at the age of 23 after being diagnosed with a rare form of Leukaemia.
Korean group Supporters for the Health and Rights of People in the Semiconductor Industry (SHARPS), who represent those claiming to be suffering from cancer as a result of working at Samsung, welcomed the company's shift in position.
"We welcome Samsung's announcement because they recognized the occupational disease in their factory and they also apologised that they did not do good to those victims," Jeong-ok Yoo Kong, SHARPS' spokesperson, told CNBC in a phone interview.
But the group said Samsung needed to come back to the negotiating table after claiming that the electronics firm had failed to engage in a dialogue since December. Samsung, however, said it promised to work with those affected.
"We would like to assure you that we stand ready to resolve the issue with the concerned parties with utmost sincerity," the company said