Samsung workers begin voting on tentative wage deal

SEOUL – Samsung Electronics’ workers began voting on May 22 on a tentative wage deal that averted what would have been a major strike at the South Korean chip giant this week.

The company and its union reached the provisional agreement late on May 20 following last-minute, government-mediated talks, avoiding a planned 18-day strike that was set to begin on May 21.

The dispute unfolded against the backdrop of a global artificial intelligence boom that has turbocharged Samsung’s chip business while lifting South Korea’s economic growth and stock market.

The company and the union’s lawyer both told AFP the vote – initially scheduled to begin on May 23 – will instead start on the afternoon of May 22.

A separate union document seen by AFP said the vote will run through May 27 and be conducted online.

Around 70,000 members are expected to be eligible to vote, and the agreement will be “automatically ratified” if more than half cast ballots and a majority of those voting approve it, according to the union’s lawyer.

Local reports say the agreement is likely to pass, as most union members come from the chip division.

The tentative deal introduces a new bonus pool for employees in the semiconductor division, equivalent to 10.5 per cent of its operating profit, to be paid in stock.

Semiconductor employees are expected to receive around 509 million won (S$431,000) under the new deal, a company official confirmed to AFP on May 21.

The figure is a rough calculation based on an estimated 331 trillion won in operating profit – in line with market consensus reported by Yonhap News Agency – and roughly 78,000 chip employees.

Samsung’s union had argued workers lagged behind those in rivals such as SK Hynix, where bonuses in 2025 were more than three times higher.

The union’s lawyer said Samsung has seen a talent drain to its rival and a rise in union membership due to what workers describe as a “lack of transparency” in the bonus system.

Both Samsung and SK Hynix posted record profits in the first quarter, driven by global demand for AI chips.

Analysts say hefty bonuses could help retain South Korea’s talent, as overseas firms including Tesla push deeper into semiconductors.

“South Korea accounts for around 80 per cent of the global memory chip market,” Dr Kim Dae-jong, a business professor at Sejong University, told AFP.

“But rising bonus demands could come at the expense of future investment, as money that might otherwise go into research and development or shareholder returns is redirected towards compensation,” he added.

The development has also fuelled similar demands across industries including biotech, IT and shipbuilding, with unions at firms such as Samsung Biologics and Hyundai Motor Group reportedly seeking a greater share of profits.

Legal action

While workers are expected to benefit from the deal, some shareholders voiced opposition, vowing to pursue legal action against the tentative agreement.

On May 21, a shareholders’ group staged a rally near the residence of Samsung chairman Lee Jae-yong, arguing that operating profit-linked bonuses had not been approved through a shareholder resolution and therefore lacked legal validity under the current commercial law.

Workers outside the core chip divisions are expected to receive lower payouts, with local reports suggesting around six million won for those in smartphone and home appliance units.

Loss-making non-memory chip operations could also see reduced bonuses.

Samsung memory chips are used in products ranging from consumer electronics to computer processors, while its next-generation high-bandwidth memory chips are key components for scaling up AI data centres.

The tech giant said in April that its first-quarter operating profit jumped roughly 750 per cent from a year earlier, while its market capitalisation topped US$1 trillion (S$1.28 trillion) for the first time in May.

The prospect of a strike had raised concerns over the potential impact on South Korea’s economy, with semiconductors accounting for around 35 per cent of the country’s exports. AFP