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Tech & Science
Samsung reached a last-minute wage agreement to prevent a strike by 48,000 workers, offering bonuses up to $416,000, mostly in stock over ten years.
On May 20, Samsung Electronics narrowly avoided a significant labor strike by agreeing to a tentative wage deal with its National Samsung Electronics Union just before 48,000 employees were set to begin an 18-day walkout. This agreement halted the strike and caused Samsung’s shares and South Korea’s KOSPI index to jump nearly 8%. A ratification vote is scheduled from May 22 to 27.
The deal includes a 6.2% increase in base salary and a special bonus pool equivalent to 10.5% of operating profits from Samsung’s chip division, with no cap on distribution. According to Investing.com, a memory chip worker earning a base salary of about 80 million won could receive a bonus around 626 million won, approximately $416,000, primarily paid in stock spread over ten years. This figure is not representative of an average payout but highlights the scale of the offer. The bonus pool depends on Samsung achieving operating profit targets of 200 trillion won between 2026 and 2028, as reported by CNBC.
A key factor in reaching this agreement was Samsung’s decision to postpone by one year a controversial change to how performance bonuses are distributed, which had been the main cause of the threatened strike.
Samsung accounts for nearly 25% of South Korea’s total exports and holds the largest share of the global DRAM memory market. A prolonged strike would have jeopardized about 36% of the worldwide DRAM supply at a time when AI infrastructure investments are driving unprecedented demand for chips. JPMorgan estimated that the strike could have resulted in operating profit losses between $14 billion and $20.8 billion.
The agreement also establishes a new industry standard. Rival SK Hynix removed its bonus cap in September 2025, allowing workers to earn up to 10% of profits. Samsung’s uncapped 10.5% bonus pool now raises the benchmark for the chip sector. For U.S. cloud providers and AI companies already dealing with tight memory supplies, increased labor costs at Korean chipmakers may eventually influence component prices.
The union has expressed confidence that the ratification vote will pass, though the deal remains tentative until then. If approved, Samsung will have avoided what could have been its most disruptive labor action in recent years, though the financial cost of the agreement will likely attract close scrutiny during upcoming quarterly earnings reports.
