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ToggleWith strike expectations fading and market investors feeling reassured, Samsung Electronics shares rose more than 6% intraday, reaching 288,500 won.
The bonus cap was the trigger.
Samsung's union has three core demands: to remove the cap on performance bonuses (currently capped at 50% of base salary), to institutionalize 15% of operating profit as a source of bonus revenue and to make the calculation transparent and open, and to increase base salary by 7%.
The biggest stimulus comes from its neighbor, SK Hynix. In 2025, Hynix's average annual salary will be 185 million won, while Samsung's will only be 158 million won, a difference of about 27 million won. What's even more critical is that Hynix has already removed the bonus ceiling, and the average bonus per employee will reach 140 million won in 2025. Samsung employees are watching their competitors take away the money and are only thinking about switching jobs for a higher salary.
Samsung's management offered a one-time special bonus or a limited 10% profit package, refusing to permanently change the bonus system, citing concerns about increased long-term operational burdens, impact on competitiveness, and shareholder interests. The union remains unconvinced, and negotiations have reached a stalemate.
The strike has subsided, but public sentiment remains unsettled.
This is not the first time Samsung has faced the threat of a strike. In June 2024, the union launched Samsung's first strike in 55 years, which escalated into a 25-day indefinite strike in July. At the time, Samsung claimed that it had "no significant impact on production capacity."
However, by 2026, Samsung had entered "emergency operation mode" and had prematurely reduced chip production lines. JPMorgan Chase estimated that the economic impact of the 18-day strike could reach $14 billion to $20.8 billion.
Samsung's stock price surged to a record high of 299,500 won on May 14, before plummeting by about 9% in a single day due to strike fears, wiping out nearly $66 billion in market value. The court injunction stabilized short-term market confidence, but Samsung still trails SK Hynix's 57% market share in HBM memory with 35%, and the continued brain drain will only make it harder to close the gap.
Frequently Asked Questions
Why did Samsung's union strike?
The union is demanding the removal of the 50% cap on performance bonuses, the institutionalization of 15% of operating profit as a source of bonus revenue, and a 7% increase in basic wages. The core motivation is to narrow the salary gap with SK Hynix, which is about 27 million won per capita.
What does a strike injunction issued by a South Korean court include?
The Suwon District Court ordered the union to maintain a minimum number of personnel for safety facilities and to prohibit occupying factory premises or obstructing employees from entering or leaving. If they do not comply, they will be fined approximately 100 million won (about US$70,000) per day. As a result, the expectation of an 18-day strike is waning.
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