Members of the Samsung Electronics Labor Union hold a flag outside the company’s foundry and semiconductor factory in Pyeongtaek on April 23, 2026, as they hold a large rally to demand the removal of caps on performance bonuses. (Photo courtesy of Jung Yeon-je/AFP via Getty Images)
Jung Young Jae | AFP | Getty Images
Samsung Electronics shares rose more than 6% on Thursday after the company’s labor union called off an 18-day strike scheduled for late Wednesday, allaying fears of unrest at the South Korean chipmaker.
The union had announced on Wednesday that it would continue its strike after government-brokered talks collapsed. However, a tentative agreement was reached after renewed negotiations led by South Korean Labor and Employment Minister Kim Yong-hoon.
Samsung’s rise was also supported by optimism across semiconductor stocks, after Nvidia reported another strong quarter last night, with revenue up 85% to $81.62 billion from $44.06 billion a year earlier.
Samsung’s labor union said in a statement that the general strike has been called off and all members will participate in a May 22-27 vote on a temporary wage agreement.
In a press conference streamed on YouTube by government broadcaster KTV, Kim emphasized that this is still a provisional agreement and that there is “a long way to go before a final agreement is reached.”
He said that although there were various unresolved issues, the gap between the two sides had “closed considerably”, adding that the union had made significant concessions.
According to South Korean media outlet Yonhap News, the tipping division, which generates huge profits, will receive 40% of the total bonus, while other business divisions will receive 60%. The controversial decision on how to distribute bonuses among Samsung’s loss-making divisions has been postponed by a year, Yonhap News reported.
Reuters reported, citing a document shared between union negotiators and the union, that Samsung would allocate special bonuses worth 10.5% of operating profits to the chip division, while accepting the union’s demands to link bonuses to operating profits and eliminate caps on bonuses.
Yonhap News also reported that Samsung Electronics plans to partially fund special bonuses with its own stock for at least 10 years, provided the chip division exceeds its operating profit target of 200 trillion won ($133.65 billion) from 2026 to 2028. The target has been lowered to 100 trillion won from 2029 to 2035, Reuters reported, citing union documents.
The union had previously demanded performance bonuses equal to 15% of Samsung’s operating profits, the removal of caps on bonus payments, and formalization of the bonus structure.
Rival SK Hynix agreed to a wage agreement in September last year that set aside 10% of operating profits as bonuses for employees.
Following the collapse of the talks, South Korean President Lee Jae-myung stated at a cabinet meeting, “I understand that some labor unions are working to secure profits through rights, but appropriate restrictions are also necessary,” without mentioning Samsung by name.
South Korean Prime Minister Kim Min-seok estimated that direct losses from the 18-day strike could reach 1 trillion won. If Samsung is forced to scrap the semiconductor wafers it is already producing due to a disruption in chip production, the economic loss could reach 100 trillion won.
He emphasized that Samsung Electronics accounts for 22.8% of South Korea’s exports and 26% of its market capitalization. Seoul’s presidential office also said that Samsung Electronics’ sales accounted for 12.5% of gross domestic product (GDP).
—CNBC’s Lisa Kim and Blair Baek contributed to this report.
