Union members at Samsung Electronics on Wednesday approved a deal with management that secures massive annual bonuses, after threats of a major strike. The deal comes at a time when the global boom in artificial intelligence (AI) is significantly boosting profits for the South Korean tech giant.
The deal allows about 78,000 employees from the company’s 125,000-strong domestic workforce to be eligible for bonuses of approximately $370,000 this year, based on an estimate of annual operating profit.
The company’s largest union said more than 73 percent of members supported the deal in an electronic vote that lasted six days.
The deal was reached at the last minute last week to avoid an 18-day strike, which has raised concerns about the possible fallout for South Korea’s economy.
“It’s not quite at the level we wanted … but we have to accept what we get,” said a 23-year-old chip worker, who spoke on condition of anonymity.
The workers admitted that there is criticism from the public because of the large payments, but they said that their situation is often misinterpreted.
A surge in demand for memory chips, crucial for AI data centers, has boosted the company’s earnings significantly. Samsung Electronics announced in April that operating profit in the first quarter increased by about 750 percent compared to the same period last year.
The company’s market value exceeded $1 trillion for the first time.
Tensions within the company
According to the union, semiconductor workers will receive bonuses equal to 10.5 percent of their division’s operating profit, with an additional 1.5 percent in cash and the rest in stock.
The bonus system caused tensions between different departments within the company, as well as among shareholders and related firms.
At the same time, pressure is mounting on the wider technology sector in the region, including competitors such as SK hynix, which has also seen strong growth in value and profits due to AI demand.
Analysts say the high bonuses could help retain engineering staff as companies in the U.S. and other countries ramp up investment in AI chips.
At the same time, debate is growing in the industry about how the gains from the AI revolution should be distributed more equitably, while some political officials in South Korea are considering “national dividend” models.
Similar arguments and worker discontent have been reported at other major chipmakers, including Taiwan Semiconductor Manufacturing Company, which is also posting record profits thanks to AI demand.
Within Samsung Electronics, divisions also appeared between employees in the profitable semiconductor sector and other divisions, where the results are weaker, while part of the workers and shareholders believe that the agreement is not harmonized enough.
(Vijesti.ba)
Chat readers
Join the discussion