Samsung hits record high as union threatens strike

Samsung shares rose 4.8% to a record high, but it still lagged SK Hynix as concerns over a potential strike weighed on sentiment.

The company underperformed its rival by more than 25 percentage points last month after a union rally on April 23.

Samsung’s union has threatened an 18-day strike starting May 21 over pay, seeking 15% of chip division operating profit. It rejected management’s offer of a 10% bonus pool and a 6.2% wage increase.

Citigroup cut its price target on April 30, citing potential bonus costs. Samsung said it would continue negotiations and aim to limit production disruption.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

SK Hynix’s uncapped bonus deal is driving Samsung’s labor dispute

Strike threats came after SK Hynix dropped its bonus cap and set aside 10% of annual operating profit for performance payouts 1.
That plan could give SK Hynix staff average bonuses of about US$477,000 this year. Some forecasts put next year’s figure near US$900,000 1.
Samsung’s union rejected management’s offer and wants a bigger share of chip division operating profit, along with other changes 2.
Pay gaps are already affecting retention. About 200 Samsung employees reportedly moved to SK Hynix over the past four months for better compensation 3.

Samsung’s bonus fight fits a broader change in South Korea’s economy

A long strike could lead Nvidia, AMD, and other clients to spread orders to steadier suppliers such as TSMC, the world’s largest contract chip manufacturer. That could weaken Samsung’s market share over time 4.
The clash reaches beyond Samsung. Unions at Hyundai Motor and other large companies are seeking similar profit-sharing plans, which is spreading pressure across South Korean industries 3.
Huge bonus projections are adding to concern over what the Bank of Korea, South Korea’s central bank, calls a “K-shaped” economy, where tech pulls away from the rest 5.
Online backlash is growing as posters argue that windfalls tied in part to state-funded infrastructure and tax credits should be shared more widely 6.