Reuters reported on the 16th that Samsung Electronics proposed performance bonuses in the 600% range for the memory semiconductor business unit, while offering up to 100% for the non-memory semiconductor institutional sector.
According to the wage negotiation minutes obtained by Reuters on Mar. 3, Samsung Electronics proposed performance bonuses equal to 607% of annual salary for employees in the Device Solutions (DS) institutional sector memory business unit.
By contrast, for Foundry and System LSI, the loss-making business units within DS, it set performance bonuses at 50–100%.
DS, which oversees Samsung Electronics' semiconductor business, consists of three major businesses: "memory," focused on data storage; "System LSI," covering system semiconductors such as design and contract manufacturing; and "foundry."
Among these, the memory business unit recently posted massive profits on surging demand for artificial intelligence (AI), but the rest of the system semiconductor institutional sector recorded large losses.
Kim Hyeong-ro, vice president and the company's chief negotiator, said the system semiconductor business unit "recorded losses in the trillions of won, and to be honest, if it weren't our company, they probably would have gone bankrupt or shut down," adding, "How could we justify paying performance bonuses," according to Reuters.
The labor union reportedly pushed back, saying such a gap in performance bonuses would undermine the company's vision of "No. 1 in system semiconductors by 2030" and spur employee departures.
Union leader Choi Seung-ho said, "If the memory business unit receives a 500 million won performance bonus while the foundry business unit receives only 80 million won, would those employees have any motivation to keep working."
If the performance bonus talks do not conclude, the union plans to strike from the 21st of this month to Jul. 7. Amid the threat of a general strike, the company proposed resuming negotiations, but the union said there had been no change in management's stance and announced it would press ahead with the strike.
Samsung Electronics is continuing labor-management talks amid the threat of a general strike. JPMorgan estimated that if the strike materializes, Samsung Electronics' operating profit could fall by 2.1 trillion–3.1 trillion won ($14.08 billion–$20.79 billion).