Samsung Electronics workers in South Korea voted to approve a major compensation agreement tied to the company's booming AI semiconductor business after threatening to conduct a strike that could have altered global chip supply chains.
The agreement came after months of tensions inside Samsung's semiconductor division, where workers argued that soaring profits driven by artificial intelligence demand were not being shared fairly with employees.
About 74% of more than 62,000 union members voted in favor of the deal, which halted a planned 18-day strike, according to reporting from Euronews.
Under the agreement, Samsung will allocate 10.5% of operating profit from its semiconductor division toward employee bonuses, with payouts largely issued in stock. Workers in the company's memory chip business could receive up to 600 million won, or roughly $398,000, if Samsung reaches projected profit targets over the coming years, Reuters reported.
Samsung vice chairman Yeo Myung-gu said after the vote that management and labor would "work together with one mind to strengthen global competitiveness," according to the company statement.
The labor dispute drew attention from South Korea's government because of Samsung's central role in the country's economy and the wider semiconductor supply chain. A strike at the world's largest memory chipmaker risked worsening shortages tied to AI data center expansion and advanced chip manufacturing, according to Reuters.
Samsung has been under pressure to narrow the compensation gap with rival SK Hynix, which has also benefited heavily from demand for high-bandwidth memory chips used in AI systems. Workers at SK Hynix reportedly received major profit-sharing payouts last year, adding pressure on Samsung unions during negotiations.
The agreement also exposed divisions within Samsung itself. Unions representing employees in the company's consumer electronics and appliance businesses challenged the compensation structure in court, arguing the deal disproportionately benefited semiconductor workers while other divisions received significantly smaller bonuses, according to Reuters.
The semiconductor division has become increasingly important to Samsung as global investment in AI accelerates. Demand for advanced memory chips used in AI servers and cloud computing has surged over the past two years, helping semiconductor companies post record profits. That growth has pushed Samsung, SK Hynix and Micron deeper into competition over AI infrastructure contracts and manufacturing capacity.
The broader dispute also reflected rising labor activism in South Korea, where unions at several technology and telecom companies have begun demanding larger shares of AI-related profits. Employees at companies including Kakao and LG Uplus have reportedly raised similar compensation concerns in recent months.
The final agreement was reached after government-mediated negotiations and court proceedings tied to the bargaining process. A South Korean court rejected an injunction request from employees attempting to halt the negotiations shortly before the vote concluded, according to The Korea Herald.
