Samsung Electronics employees have ratified a historic profit-sharing agreement, with semiconductor division staff poised to receive substantial bonuses, averaging nearly $400,000 per person, fueled by the booming memory chip sector.
The agreement was approved on Wednesday, receiving 74% support from union members. This resolution concludes months of labor-management disputes at the world's largest memory chipmaker over how to distribute the massive profits generated by the artificial intelligence boom. The union had previously threatened strike action if an agreement was not reached.
Under the terms, approximately 78,000 semiconductor employees will share 10.5% of the company's operating profit. According to projections from KB Securities in South Korea, Samsung's operating profit for the year is forecast to reach 327 trillion won. Based on this estimate, the total bonus pool would exceed 34 trillion won (approximately $226 billion). These bonuses are in addition to the company's existing bonus system, which allocates 1.5% of operating profit.
The news provided a boost to Samsung's share price, which rose nearly 7% on Wednesday.
The distribution of this chip business bonus pool is structured as follows: roughly 40% will be divided equally among all eligible employees, with the remaining portion allocated based on the performance of individual business units. Employees in the memory chip division are expected to receive an average of 600 million won each. Meanwhile, staff in the persistently loss-making foundry chip and logic chip design divisions are set to receive average bonuses ranging between 150 million and 200 million won.
South Korean rival SK Hynix pioneered a similar scheme last year, pledging to distribute 10% of its operating profit to employees over the next decade. Based on its projected annual operating profit of 250 trillion won, this would translate to an average bonus of approximately 710 million won for its 35,000 employees.
Currently, both companies are experiencing significant revenue growth due to surging demand for high-bandwidth memory chips used in AI devices. Samsung recently became the first South Korean company to achieve a market capitalization exceeding $1 trillion. On Wednesday, SK Hynix also joined the trillion-dollar market cap club. In the U.S., Micron Technology's stock closed above the trillion-dollar valuation mark on Tuesday in New York.
Unlike SK Hynix, Samsung is not solely a chip manufacturer. According to a source familiar with the matter, employees in the Device eXperience division, responsible for producing smartphones, TVs, and other digital products, are expected to receive bonuses of only around 6 million won from this agreement.
The deal has also drawn criticism from conservative quarters, who fear it may set a precedent leading to similar demands from employees at other major South Korean corporations. Employees at internet group Kakao, telecom operator LG Uplus, and pharmaceutical firm Samsung Biologics have already begun advocating for profit-sharing arrangements.
Song Eon-seok, a lawmaker from the main opposition People Power Party, commented last week, "The precedent set by the Samsung agreement will trigger strike waves across industries, ultimately weakening South Korea's industrial competitiveness. A tsunami of strike chaos is approaching."
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