Samsung’s largest labor union in South Korea has suspended a planned strike set to begin on May 21 after reaching a tentative agreement on bonuses with the company. Approximately 48,000 workers were expected to participate in an 18-day walkout that could have significantly impacted memory chip production, which is Samsung’s main revenue source.
Union leader Choi Seung-ho announced that unionized workers will vote on the tentative agreement from May 22 to 27. A final agreement will be contingent upon the outcome of this vote. Samsung stated, “With a humble attitude, we will build a more mature and constructive labor-management relationship to ensure that such an incident never happens again.”
The strike was prompted by failed negotiations over bonuses. The union demanded the removal of a cap on bonuses, set at 50% of annual salaries, alongside a request for 15% of annual operating profit to be allocated to the bonus pool. The union claimed that rival SK Hynix provided bonuses three times higher than those offered to Samsung workers last year, prompting some personnel to leave for better pay from SK Hynix.
According to reports, Samsung agreed to eliminate the cap on bonuses and to allocate 10.5% of its annual operating profits to employee bonuses. The bonus pool will see 40% designated for workers in the memory chip division, with the remaining 60% spread across other units. While the agreed percentage is lower than the union’s initial request, it exceeds SK Hynix’s 10% allocation.
Workers’ bonuses will depend on the memory division generating at least KRW 200 trillion ($133 billion) in profits between 2026 and 2028, and KRW 100 trillion ($66 billion) from 2029 to 2035. Part of the bonuses will be distributed as company stock over a minimum period of 10 years.
The government intervened soon after the strike announcement, with South Korean Labor Minister Kim Young-hoon mediating discussions. Samsung, a vital player in South Korea’s economy, contributes 12.5% of the country’s GDP and is the largest memory chip manufacturer globally. The company reported an operating profit of KRW 53.7 trillion ($35.63 billion) for the first quarter of 2026.
Prime Minister Kim Min-seok indicated that the potential losses from the planned strike could reach KRW 1 trillion ($669 million), while the broader economic impact of the walkout could total KRW 100 trillion ($66 billion) if production was disrupted during this period.
