Samsung Workers Approve Bonus Deal after Big AI Profits

FILE PHOTO: Samsung Electronics’ labor union members chant slogans during a protest against the company’s compensation levels ahead of a planned lengthy strike in front of Samsung Electronics semiconductor plant in Pyeongtaek, South Korea, April 23, 2026. REUTERS/Kim Hong-Ji/File Photo

Samsung Electronics union members on Wednesday approved a deal with management securing massive annual bonuses after threatening a major strike, as the global artificial intelligence boom causes the South Korean chip giant's profits to soar.

It means that around 78,000 employees from the company's 125,000-strong domestic workforce are eligible to receive a bonus of roughly $370,000 this year, based on a market estimate of annual operating profit.

Samsung's largest workers' union said in a statement that more than 73 percent of its members had backed the agreement in an electronic vote held over six days.

The deal was struck at the last minute last week to avert an 18-day strike that had raised fears over the impact on South Korea's economy.

Frenzied demand for the memory chips that power AI data centres has turbocharged Samsung's earnings.

The firm in April said first-quarter operating profit soared roughly 750 percent year-on-year, while its market value topped $1 trillion for the first time this month.

Under the union's 10-year deal -- which is tied to ambitious performance targets -- annual bonuses for employees in the semiconductor division would amount to 10.5 percent of their segment's operating profit.

The bonuses will be paid in shares, alongside an additional 1.5 percent in cash, AFP reported.

The new bonus scheme has fueled tensions among workers in other divisions, who will receive different rewards under the deal, as well as subsidiaries and shareholders.

The prospect of a strike had sparked wider concerns in South Korea, where Samsung Electronics alone accounts for around 12.5 percent of gross domestic product and memory chips make up about 35 percent of exports.

It has also fanned a debate over how AI profits should be distributed.

A senior presidential official has floated the idea of a "national dividend" -- arguing that excess AI-related tax revenue could be used to support social welfare programs.

Analysts say large bonuses could help prevent engineering talent from moving abroad, as US firms such as Tesla ramp up investment in AI chips.

According to Samsung's union, workers at rival chipmaker SK hynix -- which also hit a $1 trillion market capitalization on Wednesday -- received bonuses more than three times larger than those paid by Samsung last year.

The promised windfall at both firms has sharply elevated the social status of chip engineers in South Korea.

A simple jacket bearing the SK hynix logo went viral on social media this month as a symbol of wealth and success, with parody posts depicting it as a "golden ticket" to luxury boutiques or better dating prospects.

Yonhap news agency said jobs at Samsung and SK hynix now guarantee "a boost in marriage market value", citing a rise in their "desirability indices" compiled by matchmaking agency Sunoo -- catching up with professions such as doctors and lawyers.

There have been reports of worker discontent over similar issues at Taiwan's chip production giant TSMC, which has also logged record net profits due to AI demand.

The Samsung agreement is fueling labor demands across South Korea, with workers in sectors ranging from biotech and autos to shipbuilding asking for a larger share of corporate profits through bonuses.

Within Samsung Electronics, the deal has deepened divisions between employees in the highly profitable semiconductor business and other divisions such as mobile, display and consumer electronics, where profits have stagnated or declined.

The tensions have already led to legal action, with a smaller union representing workers outside the semiconductor division filing an injunction on Tuesday, seeking to block the agreement they say disproportionately favors chip employees.

Discontent is also spreading among employees at Samsung affiliates including Samsung Display, Samsung SDI and Samsung Electro-Mechanics, which are separately listed and offer significantly smaller bonuses.

Some shareholders have also voiced opposition, arguing the agreement lacked their approval. A group of retail investors said they were prepared to pursue legal action.