Samsung chip employees to get average $338,000 bonus after deal; averts 18-day planned strike

Samsung Electronics has reached a tentative agreement with labour unions that is expected to grant semiconductor employees average bonuses of about 509 million won ($338,000). With this, the South Korean tech giant has averted a planned 18-day strike that was scheduled to begin this week.

According to a report by AFP, company officials said the provisional deal was reached recently after government-mediated talks between management and unions. Under the deal, Samsung will implement a profit-linked bonus system for employees working in its semiconductor business.

Under the terms of the proposal, workers would receive bonuses equal to 10.5% of the chip division's operating profit , paid in stock, plus an additional 1.5% in cash. Staff could, in theory, receive bonuses of up to 12% of operating profit. The company’s officials told AFP that the estimated payout of 509 million won per employee is based on projected operating profits of 331 trillion won and an employee base of roughly 78,000 semiconductor workers.


How Samsung’s bonus programme is linked to long-term profit targets


This proposal for a ten-year bonus system depends on the semiconductor department meeting certain criteria for operating profit. These criteria include a yearly operating profit of 200 trillion won or more between 2026 and 2028, and a yearly operating profit of 100 trillion won or more until 2035.

The agreement comes as Samsung’s semiconductor business benefits from increased demand linked to artificial intelligence technologies. The company’s memory chips are used in consumer electronics, processors and AI-focused high-bandwidth memory products designed for data centres.

Earlier this year, Samsung said its first-quarter operating profit rose around 750% compared with the same period a year ago. The company’s market capitalisation also crossed $1 trillion this month.


Why Samsung’s shareholder group is opposing the agreement


Even with the provisional labour agreement, opposition from certain shareholders persists. One such group, the Korea Shareholders Action Headquarters , stated that it will take legal action against this agreement because the profit-sharing bonus plan falls within the purview of the Commercial Law, which requires shareholder consent.

The group held a rally near Lee Jae-yong's residence and stated it would “use all legal means available” to stop any bonus payments if the agreement is finalised without what it described as the required procedures.

The prospect of an extended strike had raised concerns over potential economic impacts in South Korea, where semiconductors account for approximately 35% of national exports. The agreement temporarily eases concerns about disruptions to one of the country’s key industries.