Samsung Electronics Proposes 600% Bonuses for Memory Division, 50-100% for Foundry

Samsung Electronics has proposed a bonus of over 600% for its memory semiconductor division, while offering bonuses of up to 100% for its non-memory semiconductor sector, according to reports.

On May 16, Yonhap News reported that Reuters obtained minutes from wage negotiation meetings that revealed Samsung's offer. The documents indicated that in March, Samsung proposed a bonus equivalent to 607% of annual salaries for employees in the Device Solutions (DS) division's memory sector. In contrast, the foundry and system LSI divisions, which are currently operating at a loss, were offered bonuses ranging from 50% to 100%.

The DS division, responsible for Samsung's semiconductor business, consists of three main sectors: memory, system LSI, and foundry. While the memory division has recently seen substantial profits due to a surge in artificial intelligence (AI) demand, the other sectors have reported significant losses.

Reuters reported that Kim Hyung-ro, the chief negotiator for the company, stated, "The system semiconductor division has recorded losses in the trillions of won, and frankly, if it weren't for our company, they would likely have gone bankrupt or closed down. How can we justify paying bonuses?"

The labor union has expressed concerns that this disparity in bonuses could undermine the company's vision of becoming the top player in the system semiconductor market by 2030 and could lead to employee attrition. Union Chairman Choi Seung-ho remarked in the meeting minutes, "If the memory division receives a bonus of 500 million won while the foundry division only gets 80 million won, will those employees have any motivation to continue working?"

The union plans to strike from May 21 to June 7 if the bonus negotiations do not reach a resolution. Amid the looming threat of a general strike, the company has proposed resuming negotiations, but the union insists it will proceed with the strike unless there is a change in the company's stance.

If the general strike goes ahead, the financial impact could reach tens of trillions of won. Global investment bank JP Morgan recently reported that the strike could reduce Samsung's annual operating profit by over 40 trillion won. Union estimates suggest that production disruptions could result in losses ranging from 20 trillion to 30 trillion won.