SK Hynix shares dropped 4.9% to ₩1,611,000 on Tuesday after union members narrowly rejected a tentative wage agreement. Of the 15,045 workers who cast ballots, 50.08% voted against the deal, with the final margin coming down to just 25 votes. The broader KOSPI fell around 3% on Tuesday, with chip stocks under pressure ahead of Nvidia earnings.
The rejected agreement included a 6.3% wage increase and a revised profit-sharing bonus structure that would pay 40% in cash and 60% in company stock. Workers pushed back against the shift toward stock-heavy bonuses, citing concerns about share price volatility. Under the existing arrangement, 10% of SK Hynix’s annual operating profit is set aside for profit-sharing bonuses, with 80% paid in cash and 20% deferred over two years.
The dispute drew comparisons to Samsung Electronics, which settled a similar pay conflict earlier this year. In May, Samsung agreed to allocate 10.5% of its semiconductor operating profit to special bonuses for chip workers, paid in company stock, averting a threatened strike. Both companies have faced scrutiny over profit-sharing plans after strong earnings from AI-driven memory demand.
Separately, Needham analyst Quinn Bolton raised his SK Hynix price target from $200 to $220 while maintaining a Buy rating. The move followed the company’s board approval of a 40 trillion won share repurchase, covering about 24 million shares, or roughly 3.3% of total shares outstanding. SK Hynix also raised its 2025-2027 shareholder return goal to over 50% of cumulative free cash flow. JPMorgan estimated the company could return at least $130 billion to shareholders through 2027.
SK Hynix reported strong second-quarter results on July 29, with revenue up 257% year-over-year to $56.9 billion and operating profit up 557% to $43.4 billion. Despite the bullish analyst view, SKHY fell around 5% on Monday after South Korea’s presidential office declined to clarify ongoing U.S. trade negotiations. The Nasdaq Composite dropped more than 1%, while Micron fell nearly 6% and SanDisk declined around 6.5%. Wall Street consensus remains a Strong Buy with an average price target of $248.
