Samsung Electronics unionized workers approve wage deal, averting strike

Unionized workers at Samsung Electronics have voted to approve a wage agreement, according to union officials, easing concerns about potential disruptions to the global supply chain. The vote, which ran for six days, saw 73.7 percent of the 62,616 members of the tech giant's two largest unions approve the tentative deal, Yonhap News Agency reported. The agreement was finalized after a majority of eligible voters took part in the vote and a majority voted in favor of the proposal.

Labor and management reached the agreement just an hour before an 18-day strike was set to begin at the world's top memory chipmaker last Thursday, as reported by Yonhap. The two sides had been deadlocked since late last year over performance-based bonuses tied to earnings from the company's artificial intelligence-related semiconductor business amid an ongoing global memory chip boom.

Under the deal, Samsung will allocate a special semiconductor performance bonus equivalent to 10.5 percent of business performance earnings, without a cap, according to Yonhap. The special bonuses will be paid in company stock over at least 10 years, based on targets for the chip division to achieve more than 200 trillion won (US$132 billion) in annual operating profit from 2026 to 2028 and 100 trillion won from 2029 to 2035. Of the total bonus pool, 40 percent will be allocated to the division as a whole, while 60 percent will be distributed to individual business units. A decision on how to divide the pool among loss-making divisions was postponed for one year, Yonhap reported.

Based on forecasts that Samsung's operating profit could reach 300 trillion won this year, the agreement could translate into bonus payouts of up to 600 million won for each of the 28,000 employees in the company's profitable chip division, Yonhap reported. In comparison, employees in Samsung's division that oversees smartphones and consumer electronics are expected to receive company stock worth around 6 million won, according to the same source.

Coverage comparison

Al Jazeera reported on the stock market reaction to the deal, noting that South Korea's benchmark KOSPI rose more than 8 percent following the announcement. The outlet described the market as having "rallied" and "soared" in its coverage. Al Jazeera also reported that Samsung Electronics' stock jumped more than 7.5 percent, and SK Hynix surged more than 11 percent.

Yonhap News Agency provided extensive details on the voting process, the bonus structure, and the broader context of the negotiations. Multiple Yonhap articles covered the vote, the signing ceremony, and the potential economic impact of the averted strike, with industry observers cited as saying estimated losses could have reached as high as 100 trillion won (US$66.7 billion).

Key claims

  • Unionized workers at Samsung Electronics voted to approve a wage agreement, as reported by both Yonhap and Al Jazeera.
  • 73.7 percent of the 62,616 members of the tech giant's two largest unions approved the tentative deal, according to Yonhap.
  • The agreement includes a special semiconductor performance bonus equivalent to 10.5 percent of business performance earnings, without a cap, as reported by Yonhap.
  • The special bonuses will be paid in company stock over at least 10 years, based on targets for the chip division to achieve more than 200 trillion won in annual operating profit from 2026 to 2028 and 100 trillion won from 2029 to 2035, according to Yonhap.
  • Of the total bonus pool, 40 percent will be allocated to the division as a whole, while 60 percent will be distributed to individual business units, as reported by Yonhap.
  • Based on forecasts that Samsung's operating profit could reach 300 trillion won this year, the agreement could translate into bonus payouts of up to 600 million won for each of the 28,000 employees in the company's profitable chip division, according to Yonhap.
  • The benchmark KOSPI rose more than 8 percent following the announcement, as reported by Al Jazeera.

Perspectives

Minority union challenge: A minority labor union at Samsung Electronics representing about 13,000 members primarily from the company's smartphone, TV and home appliance divisions will continue its legal challenge against the wage agreement, according to Yonhap. The union had initially filed for an injunction to suspend the vote on the wage deal, and after the vote concluded, it said it will instead seek to block implementation of the agreement and plans to submit revised injunction documents to the court next week. The ruling is expected within a month. The union's lawyer said the bonuses are significantly lower for non-chip divisions compared to the semiconductor employees.