Samsung Electronics’ largest labour union suspended a planned strike after reaching a last-minute tentative wage agreement with the South Korean technology giant amid a dispute over bonuses linked to booming artificial intelligence (AI) chip demand.
The union, which represents nearly 48,000 workers, said industrial action scheduled to begin on Thursday had been put on hold while members voted on the proposed agreement between May 22 and May 27.
The dispute had centred on the distribution of profits generated by soaring global demand for AI memory chips, with workers in other semiconductor divisions protesting against significantly higher bonuses proposed for employees in Samsung’s memory chip business.
Samsung had proposed bonuses of up to 607 per cent of annual salaries for workers in its memory chip division, according to reports, while employees in other business units were expected to receive between 50 per cent and 100 per cent bonuses.
The union argued that workers producing less advanced chips for companies such as Tesla and Nvidia should not be excluded from the benefits of the AI-driven semiconductor boom.
The planned strike had raised fears of disruption across global technology supply chains because Samsung Electronics remained the world’s largest memory chipmaker and a key supplier of chips used in AI data centres, smartphones and laptops.
The broader Samsung Group accounted for nearly one-fifth of South Korea’s economic output, making the dispute a major concern for the country’s export-dependent economy.
Samsung’s operating profit in the January-to-March quarter had jumped by about 750 per cent compared to the same period last year, driven largely by surging demand for AI chips.
The dispute also emerged as Samsung faced increasing competition from rivals SK Hynix and Micron Technology in the rapidly expanding AI semiconductor market.
In a statement issued after the tentative agreement was reached, Samsung said, “With a humble attitude, we will build a more mature and constructive labour-management relationship to ensure that such an incident never happens again.”
Samsung’s shares reportedly rose by more than eight per cent following news of the agreement, while South Korea’s Kospi stock index also climbed sharply.
Analysts at JPMorgan Chase had estimated that a prolonged strike could have reduced Samsung’s operating profit by between 21 trillion won and 31 trillion won.
Erizia Rubyjeana
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