San Francisco Frontiers - Samsung workers approve bonus deal after big AI profits

Under the agreement, around 78,000 employees -- out of the company's 125,000-strong domestic workforce -- will each be eligible to receive a bonus of roughly $370,000 this year, based on a market estimate of annual operating profit.

The workers' union said more than 73 percent of its members backed the agreement, which was struck last week after threats of an 18-day strike that had raised fears over the impact on the country's economy.

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

Under the 10-year deal -- tied to ambitious performance targets -- annual bonuses for employees in the semiconductor division would amount to 10.5 percent of the segment's operating profit and be paid in shares, alongside an additional 1.5 percent in cash.

However, the last-minute agreement between Samsung and its largest union over the new bonus scheme has fuelled tensions among workers in other divisions, who will receive different rewards under the deal, as well as subsidiaries and shareholders.

Around 62,600 ballots from more than 95 percent of eligible union members were cast in an electronic vote over six days to Wednesday, the union said.

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.

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

- 'Golden ticket' -

The labour dispute 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 programmes.

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 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 traditionally prestigious professions such as doctors and lawyers.

- Opposition -

The Samsung agreement is also fuelling labour demands across South Korea, with workers in sectors ranging from biotechnology and automotive to shipbuilding and information technology 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 favours 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.

K.Gray--SFF