Samsung Union Approves $26.6 Billion Compensation Deal to Avert Chip Plant Strike

Samsung Electronics just wrote a $26.6 billion check to keep its chip factories running.

The company’s largest labor union ratified a compensation agreement that hands semiconductor workers an average bonus of roughly $340,000 each. In return, Samsung averts what would have been an 18-day general strike involving approximately 48,000 employees across its chip operations.

The tentative agreement was reached on May 21, with the ratification vote running from May 22 through May 27. The total bonus pool of about $26.6 billion covers approximately 78,000 workers in Samsung’s Device Solutions chip division.

Here’s the structure: 10.5% of operating profits paid out in company stock, plus an additional 1.5% in cash. The terms are locked in for up to 10 years, contingent on the division hitting certain profit thresholds.

Some memory-chip workers, the ones closest to Samsung’s most strategically critical product lines, could receive bonuses as high as $416,000. On top of the performance-based payouts, eligible employees also stand to receive regular cash bonuses worth 50% of their base salary.

Samsung is in a genuine fight for survival in the high-bandwidth memory (HBM) chip market, the specialized silicon that powers the data centers running AI workloads. Rival SK Hynix has been eating Samsung’s lunch in HBM supply deals.

Estimates ahead of the planned walkout suggested losses could have escalated into the tens of billions of dollars.

Government mediation played a key role in getting both sides to the table and pushing toward resolution. Samsung’s union had been demanding higher profit-sharing models and longer-term commitments from the company. The 10-year lock-in structure suggests Samsung gave ground on duration while structuring the payouts in a way that aligns worker incentives with shareholder returns.

The deal was specifically crafted for Samsung’s semiconductor division, and non-chip unions within the broader Samsung Electronics organization have reportedly criticized the arrangement for focusing benefits solely on chip workers.

Samsung shares jumped between 6% and 8.5% following the announcement of the deal.

The agreement removes a major near-term risk from Samsung’s production outlook and locks in workforce stability for up to a decade. It also signals that Samsung’s management is willing to share profits aggressively to stay competitive against SK Hynix.