Samsung Electronics narrowly avoided what would have been the largest strike in its 56-year history. On the night of May 20, just 90 minutes before an 18-day walkout was scheduled to begin, management and the company’s two main unions reached a tentative wage agreement. The strike was postponed, and a voting process for union members was launched on May 22 at 2 p.m. local time. Approximately 87,000 to 89,000 union members will cast their votes electronically, with the ballot closing at 10 a.m. on May 27. The entire process is being conducted via a mobile app to accommodate shift workers at semiconductor plants.
Key Terms of the Tentative Agreement
Under the deal, Samsung will maintain its existing annual performance incentive (OPI) system while introducing a new Special Semiconductor Performance Bonus for the Device Solutions (DS) division. The bonus will be funded by 10.5% of the DS division’s operating profit, with no cap on the payout ratio. 40% of the bonus pool will be distributed equally across the DS division, and 60% will be allocated based on individual business unit performance. The special bonus will be paid in company stock for at least 10 years, provided the DS division achieves more than 200 trillion won in annual operating profit from 2026 to 2028, and more than 100 trillion won from 2029 to 2035. Additionally, the deal includes a new housing loan plan (up to 500 million won) and an average 6.2% wage increase (4.1% base + 2.1% performance).
If Samsung’s operating profit reaches the projected 300 trillion won this year, the roughly 28,000 employees in the memory chip business could receive pre-tax bonuses of up to about 600 million won each. Even loss-making units such as foundry and System LSI would receive approximately 160 million won per person. Employees in the Device Experience (DX) division will receive 6 million won worth of company stock.
Shareholder Group Seeks Legal Action
While the labor vote proceeds, a separate legal battle is brewing. A group of Samsung Electronics shareholders has publicly condemned the tentative agreement as “illegal” and is preparing to challenge it in court. The shareholders argue that converting pre-tax operating profit directly into employee bonuses — without a general shareholders’ meeting resolution — is “legally void.” During a protest on May 21, the group made clear: “If Samsung’s board proposes a resolution related to this agreement, we will file a lawsuit seeking an injunction to block what we consider illegal conduct.”
Market Reaction
The Korean stock market reacted swiftly to the strike suspension. On May 21, the KOSPI index surged 8.42% to 7,815.59 points — its largest single-day gain since April 1. Samsung Electronics shares rose 8.51% to close at 299,500 won, while SK Hynix jumped 11.17% to 1,940,000 won. Analysts attributed the rally to the removal of strike-related valuation overhangs, combined with ongoing strength in the semiconductor sector.
What to Watch
Whether the tentative agreement becomes final depends entirely on the union member vote. If approved, the deal will take effect, ending months of labor-management confrontation. If rejected, the two sides will return to the negotiating table. If talks fail again, the union could — after another round of mediation — call for a total strike once more.
