Samsung Electronics averted the worst-case strike scenario by dramatically producing a tentative agreement just an hour and a half before the planned start of an all-out walkout. Tension had gripped Samsung Electronics over fears of disruptions to semiconductor production, but the company was able to breathe for now.
On the 20th, labor and management at Samsung Electronics signed the "2026 wage agreement tentative deal" in a surprise move after last-minute talks at the Gyeonggi Regional Employment and Labor Office of the Ministry of Employment and Labor (MOEL).
Accordingly, the union's joint struggle headquarters notified members that night with "Struggle directive No. 3," saying it would "hold off on the general strike scheduled from May 21 until further instructions." The union plans to hold a vote of members on the tentative agreement from 2 p.m. on the 22nd until 10 a.m. on the 27th.
Until the morning of the day, anxiety peaked as the Central Labor Relations Commission's post-mediation collapsed and the union declared it would push ahead with a general strike. But Minister Kim Young-hoon of the Ministry of Employment and Labor (MOEL) personally stepped in to mediate, talks resumed at 4 p.m. in the form of autonomous labor-management negotiations, and a dramatic deal was reached after a last-minute marathon session.
The centerpiece of the deal is an overhaul of the performance bonus system, which had pitted labor and management against each other. While maintaining the existing OPI (Operational Performance Incentive) system, the parties created a new "special management performance bonus" for the DS (Device Solutions) institutional sector responsible for semiconductors and clarified the payout criteria.
According to the agreement, the funding pool for the DS institutional sector's special management performance bonus will consist of 10.5% of business performance and other metrics selected by mutual agreement. Notably, by deciding not to set a cap on the payout rate, they opened the door to exceptional rewards based on results.
The allocation ratio was set at 40% for the entire DS institutional sector and 60% for each business unit, and the payout rate for common organizations such as staff will be aligned at 70% of the Memory Business Unit's payout rate. However, for the contentious clause on loss-making business units, they agreed that if a loss is recorded in the fiscal year, only 60% of the common payout rate calculated from the institutional sector's pool will be paid, and this will apply starting with 2027.
Labor and management set the application period for the DS institutional sector's special management performance bonus at the next 10 years and established specific operating profit targets by period. From 2026 through 2028, the bonus will be paid each year the DS institutional sector achieves 200 trillion won in operating profit, and from 2029 through 2035, it will be paid each year operating profit reaches 100 trillion won.
They also changed the payout method. The DS institutional sector's special management performance bonus will be paid in full in company stock after tax under conditions set by the company. One-third of the granted shares can be sold immediately, but the remaining two-thirds are subject to "lock-up" conditions restricting sales for one and two years, respectively. For employees at or below CL4 (department head level), the payout rate will be adjusted based on performance evaluations.
Meanwhile, to address internal equity following the introduction of the DS institutional sector-focused special bonus, labor and management agreed to grant company stock worth 6 million won to the DX (Device eXperience) institutional sector and the CSS Business Team. In addition, management will promptly announce plans to create and operate funds for co-growth with partner firms, community contributions, and industrial safety, and, in consultation with the union, will run joint programs such as organizational culture improvements to foster a healthy labor-management relationship.
Inside and outside the industry, the deal struck on the brink of a strike is seen as Samsung Electronics having overcome a major crisis. However, because the tentative agreement must be put to a vote by members of the supra-enterprise union's Samsung Electronics chapter, it will take effect only if it passes. If the deal is voted down, some expect the possibility of a general strike to resurface.