The labor union for Samsung Electronics' semiconductor (DS) division is moving to ease penalties on special management performance bonuses for loss-making divisions such as foundry and system LSI. This initiative reflects internal concerns about widening performance bonus disparities between memory and non-memory divisions, which is expected to be a key issue in the 2027 wage negotiations.
According to the Samsung Group's inter-company labor union, 81.03% of participating members voted in favor of the 'DS Loss Penalty Improvement Proposal' during a vote held from October 14 to 22. A total of 26,947 members supported the proposal.
Out of 33,256 union members who participated in the vote, 13,517 were from the memory division, 9,744 from common organizations, 6,138 from the foundry division, and 3,179 from the system LSI division.
Based on the results, the union plans to include adjustments to the special management performance bonus criteria for loss-making divisions in next year's negotiation demands.
The main issue at stake is the distribution method of the newly established special management performance bonuses for the DS division. In May, Samsung Electronics and the union agreed to allocate 10.5% of the operating profit from the DS division for these bonuses.
Of the allocated funds, 40% will be distributed equally across the entire DS division, while the remaining 60% will be distributed based on individual division performance. While the memory division has been performing well, the foundry and system LSI divisions have continued to struggle, which could lead to significant disparities in bonuses under the current criteria.
Union representatives explained that if the penalties for loss-making divisions, which were not applied this year, are implemented starting in 2027, bonuses for non-memory divisions could decrease further. Therefore, the union has argued for the need to adjust the criteria to prevent excessive widening of bonus disparities within the DS division.
However, changing the system could reduce the share of bonuses for members in the memory division and common organizations. The union estimates that if the improvement proposal is adopted, bonuses for members in these divisions could decrease by approximately 10 to 20 million won after taxes.
Ultimately, this proposal aims to redistribute some of the bonuses from high-performing memory division members to support the non-memory divisions, leading to conflicting interests among the divisions.
Choi Seung-ho, chair of the inter-company union, stated, "Based on the voting results, we will prepare the demand for improving the DS loss penalty as a negotiation agenda and will also work with the policy committee on other issues within the DS division."
* This article has been translated by AI.
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