South Korea’s SK Hynix union approves tentative wage deal with management
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The revised agreement won the backing of 57.1 per cent of voting union members.
PHOTO: REUTERS
- South Korea’s SK Hynix union approved a revised wage deal after weeks of talks, ending collective bargaining negotiations for 2026 with 57.1% union member support.
- The new agreement increases cash bonuses to 50% from 40%, reduces stock bonuses to 50%, and allows employees to convert cash bonuses into shares.
- The deal includes a wage-deferral mechanism for losses, reflecting shared responsibility between labour and management amid strong profits driven by AI memory chip demand.
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SEOUL – SK Hynix’s South Korean union has approved a tentative wage agreement with management, the chipmaker said on Sept 16, ending weeks of uncertainty after workers narrowly rejected an earlier deal.
The agreement is expected to formally conclude the wage and collective bargaining negotiations for 2026 at the world’s second-largest memory chipmaker.
“We thank the labour union and our employees for working with us throughout this challenging process,” SK Hynix said in a statement.
The revised agreement won the backing of 57.1 per cent of voting union members, with 8,731 votes in favour, SK Hynix said.
The vote covered members of the company’s production workers’ union at its Icheon and Cheongju sites.
The company said it expanded employees’ choice over how performance bonuses are paid, following roughly two weeks of talks after workers rejected the Aug 20 deal, forcing negotiators back to the bargaining table.
The revised deal boosts the share of profit-sharing bonuses paid in cash to 50 per cent from 40 per cent, with the portion paid out in company shares reduced to 50 per cent from 60 per cent, the company said.
Employees can also choose to convert the cash portion into shares in increments of 10 percentage points, to get their entire performance bonus in stock, SK Hynix said.
The August deal called for a 6.3 per cent wage increase and a major overhaul of the company’s profit-sharing payout structure, under which 40 per cent of bonuses would be paid in cash and 60 per cent in treasury shares.
That proposal drew opposition from some workers who argued bonuses should continue to be paid primarily in cash.
SK Hynix reported a record 60.54 trillion won (S$56 billion) operating profit in the second quarter as demand for AI-related memory chips boosted earnings.
The compensation framework, which allocates 10 per cent of operating profit to employee profit-sharing bonuses, was hailed as a landmark labour agreement when it was introduced.
Howevr, it became contentious after management proposed paying a larger share of bonuses in stock rather than cash.
This week’s agreement also formalises a wage-deferral mechanism in the event of losses.
This measure reflects a commitment by labour and management to share responsibility during difficult business times while sharing the benefits of strong performance, the company added. REUTERS