However, the deal may still be beneficial for Samsung, with lower payouts compared to local competitor SK Hynix.
Details have surfaced regarding a tentative agreement between Samsung and semiconductor workers who had threatened a strike. The agreement reportedly allows some workers to receive average annual bonuses of $340,000.
The planned 18-day strike was centered around Samsung’s bonus cap for semiconductor employees, following a significant increase in potential bonuses at SK Hynix, another South Korean chipmaker experiencing growth due to AI component demand.
According to Reuters, the new deal offers all chip workers 50% of their annual salary as a regular cash bonus. Additionally, Samsung will allocate 10.5% of its annual operating profits for stock-based bonuses to semiconductor workers.
The distribution of stock bonuses was a key negotiation point, as reported by The New York Times. The final agreement allocates 40% of the total fund to the entire semiconductor division, including loss-making units, with the rest designated for the flourishing memory chip unit. The union had sought a more equitable distribution of bonuses among staff.
Reuters states that a memory chip worker earning a base salary of $50,000 could now qualify for a total bonus of $416,000. Some employees have seemingly already found ways to spend these bonuses.
Notwithstanding the impressive figures, the deal seems favorable for Samsung, as its bonus payouts are slightly less than SK Hynix’s. The majority of bonuses will be stock-based, whereas SK Hynix can issue bonuses in shares or cash. Samsung has also linked bonus payments to profit milestones.
Samsung, recently valued at $1 trillion, is South Korea’s largest company, comprising about a quarter of the nation’s exports. Its latest earnings report showed an eightfold profit increase, mainly due to memory chip sales. The union must still vote on the deal, but a union leader told Reuters he expects it will pass.