A major labour dispute at Samsung Electronics has been avoided after union members approved a new bonus agreement linked to the company’s booming AI-driven chip business. The decision comes as global demand for memory chips used in AI data centres continues to push Samsung’s profits sharply higher.
Around 78,000 employees from Samsung’s domestic workforce of 125,000 will be eligible for annual bonuses estimated at nearly $370,000 each under the new agreement. More than 73% of union members voted in favour of the deal after concerns over a planned 18-day strike that could have affected South Korea’s economy.
The 10-year agreement connects bonuses to performance targets. Employees in Samsung’s semiconductor division will receive annual bonuses equal to 10.5% of the division’s operating profit in shares, along with an additional 1.5% in cash.
More than 62,600 electronic ballots were submitted by over 95% of eligible union members during the 6-day voting period.
Samsung’s strong financial growth has been powered by rising global demand for AI chips. In April, the company reported that first-quarter operating profit jumped nearly 750% year-on-year. Its market value also crossed $1 trillion for the first time earlier this month.
However, the agreement has triggered tensions inside the company. Employees in other business units, including mobile, display and consumer electronics, are expected to receive different rewards as profits in those divisions remain weaker.
The deal has also created unrest among workers at Samsung affiliates such as Samsung Display, Samsung SDI and Samsung Electro-Mechanics, where bonuses are significantly lower. A smaller union representing non-semiconductor employees has already filed an injunction seeking to block the agreement, claiming it unfairly benefits chip workers.
The labour issue has also sparked a wider debate in South Korea over how AI profits should be shared. A senior presidential official recently proposed a “national dividend”, suggesting that excess AI-related tax revenue could support social welfare programmes.
Analysts believe higher bonuses could help retain engineering talent as companies like Tesla continue increasing investments in AI chips.
A report also noted that jobs at Samsung and SK hynix are now seen as highly desirable, with their popularity in the marriage market rising closer to professions such as doctors and lawyers.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream LinkedIn | The Mainstream Facebook | The Mainstream Youtube | The Mainstream Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.