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South Korea's Samsung Electronics workers in the company’s semiconductor division are set to receive average bonuses worth 509 million won ($338,000) this year after management and labor unions reached a tentative deal to suspend a planned strike.
The agreement, finalized late Wednesday following government-mediated talks, heads off an 18-day strike that had been scheduled to begin on Thursday. Union leaders later confirmed they would postpone the walkout "until further notice."
Under the tentative agreement, Samsung will create a new bonus pool for semiconductor employees equal to 10.5% of the division’s operating profit, with payouts made in stock. Workers will also receive an additional 1.5% in cash, bringing the total bonus allocation to as much as 12% of operating profit.
Samsung officials estimated the average payout at around 509 million won per employee based on the projected operating profit of 331 trillion won and a semiconductor workforce of roughly 78,000 people.
The arrangement is designed to stay in place for 10 years, though payouts depend on the semiconductor division meeting profit targets. Samsung must generate annual operating profit above 200 trillion won between 2026 and 2028, and more than 100 trillion won annually through 2035.
The union had originally demanded a 15% share of company profits for bonuses before the two sides reached a compromise.
Union members are scheduled to vote on the tentative deal between May 22 and May 27.
The deal lands as Samsung’s chip business continues to benefit from the global artificial intelligence boom, which has boosted the company’s earnings and fueled gains across South Korea’s stock market.
Samsung’s memory chips are widely used in consumer electronics and processors, while its high-bandwidth memory products have become critical components for expanding AI data centers.
The company reported in April that first-quarter operating profit surged roughly 750% from a year earlier. Its market capitalization also crossed the $1 trillion mark for the first time this month.
Samsung shares climbed about 8.5% to close at a record 299,500 won on Thursday as the suspension of the strike eased concerns over potential disruptions to chip production, helping push South Korea’s benchmark KOSPI index up 8.4% to 7,816 points, its strongest gain in more than two months.
Despite the tentative agreement, some shareholders opposed the new compensation plan, arguing it lacked legal validity because it was not approved through a shareholder resolution.
The Korea Shareholder Action Headquarters warned it would pursue legal action to block the payouts if the deal moves forward without additional approval procedures.
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