Samsung Electronics just bought itself labor peace, and the market loved it. Shares surged around 8% in Seoul trading after the company struck a late-stage deal with the National Samsung Electronics Union, easing fears over economic and supply-chain disruption despite concerns about higher labor costs.
The planned 18-day walkout by roughly 48,000 union members has been suspended pending a vote scheduled for May 22–27, with union leadership expecting approval, according to Reuters.
The agreement was widely welcomed in South Korea, where Samsung contributes about one-quarter of its national exports. A strike threatened both the domestic economy and the global semiconductor supply chain.
NH Investment & Securities analyst Ryu Young-ho said the markets reacted positively to the likely avoidance of a strike, though the settlement could substantially raise labor expenses.
However, Samsung may soften the short-term impact by issuing performance bonuses primarily in stock rather than cash. The union also reduced its demand for bonus allocations from 15% of operating profit.
The company is expected to earmark around 10.5% of operating profit for special bonuses within its semiconductor division, which oversees memory and logic chips.
Union documents show bonuses will be distributed in company shares over at least a decade and tied to profitability targets. The chip division must generate an annual operating profit exceeding 200 trillion won ($135 billion) between 2026 and 2028, and 100 trillion won from 2029 through 2035.
A union source told Reuters that a memory chip employee earning an 80 million won base salary could receive a bonus worth about 626 million won ($416,000), largely in stock.
In a letter to employees, chip division head Jun Young-hyun called on staff to move beyond the labor dispute and focus on Samsung’s competitiveness and long-term expansion.
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