Samsung Electronics has struck a landmark profit-sharing agreement with its largest union, sources reported Wednesday, potentially reshaping labour negotiations across South Korea. The government-mediated pact, approved by unionised Samsung workers, averted an 18-day strike by 48,000 employees at the company's semiconductor division.
Under the 10-year deal, Samsung agreed to allocate 10.5% of its semiconductor operating profit to special bonuses for chip workers, removing a cap that limited performance-linked bonuses to 50% of salary. Some memory chip workers are expected to receive total bonuses worth $416,000 this year, mainly in shares. The agreement covers roughly 78,000 of Samsung's 125,000 domestic employees.
The decision comes amid surging profits from the AI boom and mounting worker discontent over bonus disparities with rival SK Hynix. Reports indicate SK Hynix allocated 10% of operating profit to bonuses last year, with some chip workers receiving close to 3,000% of their base salary. Without the agreement, Samsung faced a major strike threat.
Business groups and policymakers have reacted with alarm. The Korea Enterprises Federation warned against spreading “excessive bonus demands” across industries. Law professor Kim Keechang noted the deal breaks norms by distributing profit before taxes. President Lee Jae Myung had expressed concerns prior to the signing.
Ripple effects are already visible. Workers at internet giant Kakao demand 13–15% of operating profit for bonuses, while unions at LG Uplus and HD Hyundai Heavy Industries call for 30%. Samsung Biologics employees struck for five days in May, seeking a 20% profit share. The new Yellow Envelope Act, effective March 2026, further strengthens union protections, likely intensifying labour disputes.
