Samsung avoids strike as workers approve massive bonus deal

What you need to know about Samsung bonuses

• Samsung staves off strike threat with wage deal in South Korea
• Agreement covers generous bonuses and pay increases
• Some say the deal disproportionately benefits workers in the semiconductor divisions

Samsung workers in South Korea approved a wage deal on Wednesday, averting a strike that had threatened to disrupt global chip supplies and dent the country's economy.

The deal comes as demand for chips for artificial intelligence (AI)  data centers drives record profits and follows months of negotiations over bonuses tied to Samsung's booming semiconductor business.

In April, Samsung's first-quarter operating profit soared roughly 750% year-on-year, while its market capitalization topped $1 trillion (€859 billion) for the first time this month.

What does the deal entail?

The government-mediated ​agreement covers around 78,000 employees, a little more than 60% of the company's workforce, who will each be eligible to receive a bonus of roughly $370,000 (€317,904) this year.

Nearly 74% of more than 62,000 union members voted in favor of the agreement, driven in part by the fact that workers at rival chipmaker SK Hynix received bonuses more than three times larger than those paid by Samsung last year, according to Samsung's union.

Under the agreement, Samsung will introduce a new 10-year performance bonus system for semiconductor workers, alongside an average 6.2% wage increase.

The deal also revealed fissures within the company as workers in other divisions say that the deal disproportionately favors semiconductor employees.

A smaller union representing consumer electronics workers has sought a court injunction to block the agreement.

Samsung plans semiconductor testing plant in Vietnam

Meanwhile, an exclusive Reuters report said Samsung Electronics plans to invest 39 trillion dong ($1.5 billion) to build its first semiconductor testing plant in Vietnam.

Construction has already begun on the facility, located about 60 km (37 miles) north of Hanoi. Operations are expected to start in November 2027.

The plant will focus on legacy memory chips, which remain in short supply as major chipmakers shift more production capacity toward high-end AI semiconductors used in data centers.

Edited by: Zac Crellin