Samsung strikes tentative deal to avert 18-day semiconductor strike
The agreement, which distinguishes between profitable memory divisions and loss-making logic units, leaves payouts slightly below rival SK Hynix while tying rewards to strict profit milestones.
Samsung has reached a tentative agreement with its semiconductor union, successfully averting a planned 18-day strike that would have disrupted its core memory chip operations. The deal provides eligible workers with an average annual bonus of $340,000, a figure driven by the company’s recent financial performance and the broader industry boom in artificial intelligence components.
Under the terms of the settlement, all chip workers will receive a regular bonus equivalent to 50 per cent of their annual salary in cash. The remaining value is structured as stock-based bonuses, funded by 10.5 per cent of the company’s annual operating profits. This funding mechanism ensures that payouts are directly linked to corporate profitability, with Samsung making the payments conditional on hitting specific profit milestones.
The negotiation process focused heavily on the distribution of the stock-based bonus pot. According to reports, 40 per cent of the total stock bonus will be spread across the entire semiconductor division, which includes loss-making logic chip units and third-party component operations. The remainder is reserved specifically for the profitable memory chip unit, which has been the primary driver of Samsung’s recent financial success.
This structure differs from the demands of the union, which had sought a larger share of bonuses distributed equally among all staff. The distinction between units is significant given Samsung’s recent earnings, which showed an eightfold increase in profits largely thanks to memory chip sales. The company, which recently achieved a $1 trillion valuation and accounts for approximately a quarter of South Korea’s exports, has positioned the deal as a strategic win by maintaining lower overall costs than rivals.
Payouts under this agreement remain slightly lower than those offered at local competitor SK Hynix. While SK Hynix bonuses can be issued in either shares or cash, the majority of Samsung’s bonus will be limited to stock. A memory chip worker with a base salary of approximately $50,000 could be eligible for a total bonus of $416,000 under the new terms, though final amounts will vary based on individual base salaries and unit allocation.
The agreement is currently subject to a vote by the union’s members. While final approval is not yet confirmed, a union leader indicated to Reuters that he expects the deal to be approved. The resolution ends a standoff that had hinged on Samsung’s bonus cap for employees in the semiconductor division, following substantial rises in bonuses available at SK Hynix due to demand for AI components.
