UNION VOTE

Samsung memory chips are found in everything from consumer electronics to computer processors – with its next-gen, high-bandwidth models used to scale up AI data centres.

Samsung in April said first-quarter operating profit soared roughly 750 per cent year-on-year, while its market capitalisation topped $1 trillion for the first time this month.

The prospect of a strike had raised concern over the economic impact on South Korea, where semiconductors account for about 35 per cent of exports.

The labour union said Wednesday that all of its members – around 70,000 staff – would participate in a vote on the tentative deal to be held between May 23 and May 28.

The government hailed the outcome of last-hour negotiations, which were mediated by the labour minister.

The tentative deal introduces a new bonus pool for employees in the chip division, equivalent to 10.5 per cent of the division’s business performance, with no payout cap.

Of the total bonus pool, 40 per cent will be allocated across the division as a whole, while 60 per cent will be distributed based on the performance of individual business units.

The union had argued that workers at rival South Korean chip giant SK hynix received bonuses last year that were more than three times larger than those paid at Samsung.

The union’s lawyer said Samsung has seen a talent drain to its rival and a rise in union membership due to what workers describe as a “lack of transparency” in the bonus system.

Samsung shares surged Thursday, up 8.2 per cent in afternoon trade in Seoul.