As the global memory and AI supply chains hold their breath in anticipation, Samsung's nearly 4.8 employees...Century-long strike crisisAt the last minute, the authorities dramatically slammed on the brakes. An hour before the strike was scheduled to take effect, labor and management reached a preliminary agreement, successfully averting a storm that could have paralyzed global HBM and DRAM production capacity.
According to the leaked agreement, Samsung made unprecedented concessions, not only removing the bonus cap but also potentially increasing performance bonuses for employees in the Device Solutions (Semiconductor) division to over 6 million won (approximately NT$1400 million) this year. This news not only significantly reduced market uncertainty but also further boosted the South Korean stock market, writing a new chapter in the profit-sharing dispute in the AI era.
Pulling back from the brink: Adding a 10.5% profit sharing ratio and removing the bonus ceiling.
The core dispute of this major strike, originally expected to last 18 days, has been the "structural reform of the bonus system." In this document, titled "Preliminary Agreement on Performance Bonuses for 2026," the management finally made positive and concrete commitments to the union's demands.
According to the preliminary agreement, Samsung will allocate an additional 10.5% of its overall performance (operating profit) as a special semiconductor performance bonus specifically for the "Device Solutions Division" (DS), in addition to the existing year-end performance bonus.
This special bonus will have "no upper limit." In terms of fund allocation, 4% will be directly allocated to the DS department, and the remaining 6% will be allocated to its subordinate departments to ensure that the core units that generate the greatest profits receive substantial returns.
The preliminary agreement, which was finalized at the last minute, will be put to a vote by union members from May 22 to 27; during this period, the strike will be suspended.
Up to 6 million Korean won! How was this astronomical prize money calculated?
The most striking aspect of this agreement is undoubtedly the staggering projected bonus figures.
Benefiting from the demand for HBM (High-Bandwidth Memory) and high-end memory driven by AI chips, industry experts are optimistic that Samsung's operating profit in 2026 could reach a record high of 300 trillion won (approximately NT$7.1 trillion). If this performance target is achieved and agreements are successfully fulfilled:
• Prize pool size:After the 10.5% increase, the total size of the semiconductor special performance bonus will reach 31.5 trillion won (approximately NT$7456 billion).
• Forms of Treasury Stock Issuance:In total, each employee in the DS department can receive a special bonus of up to 5.4 million won in the form of "treasury stock".
• Total revenue:If the existing year-end and performance bonuses are added, each semiconductor employee is expected to receive a huge bonus of up to 6 million won (about 1400 million NT dollars) this year.
The market celebrated the crisis's abating, but analysts pointed out a "hidden cost."
The news that the strike alert had been lifted was met with an immediate and enthusiastic response from the South Korean capital market.
Ryu Young-ho, a senior analyst at NH Investment & Securities, a South Korean brokerage firm, pointed out that investors were extremely worried about the potential supply chain disruptions and market share losses that the strike could cause (especially during the critical period of competing with SK Hynix for HBM production capacity). Now that the uncertainty has dissipated, it has naturally led to a strong rebound.
However, he also pointed out the long-term impact of this agreement on Samsung's operations: "a huge increase in labor costs." In the future, Samsung will inevitably need to set aside a large "reserve" for this huge bonus, which will directly compress the company's operating profit on paper. For institutional investors who pursue earnings per share (EPS), this is not entirely beneficial.
