Court Rejects Injunction on Semiconductor Bonus Voting
On May 26, the Suwon District Court rejected an injunction application seeking to halt Samsung Electronics' main union from proceeding with compensation negotiations, according to foreign media reports. The court's decision allows wage and benefits negotiations between the union and Samsung management to continue legally. The Donghaeng Union, representing approximately 13,000 employees from Samsung Electronics' non-semiconductor divisions (including the Device eXperience business unit), had filed the injunction to stop a vote by semiconductor division employees on a proposed performance bonus increase.
Background: Bonus Structure Dispute
The Donghaeng Union, Samsung's third-largest, sought the injunction after being informed it had no voting rights in the semiconductor division union members' ballot. The dispute stems from a new performance bonus structure that heavily favors the semiconductor business amid surging profits from the memory chip market.
Preliminary Agreement Reached
On May 20, Samsung Electronics and its labor representatives reached a preliminary agreement on the performance bonus plan, averting a full strike originally scheduled for May 21. According to the "2026 Performance Bonus Preliminary Agreement" signed by both parties on May 20, the company will maintain the existing annual performance bonus (OPI) system while introducing a new semiconductor special performance bonus for the Device Solutions (DS) division's semiconductor business unit.
Bonus Structure Details
The company will allocate 10.5% of operating profit as the special performance bonus fund with no upper limit. Of this allocation, 40% goes to the DS division, with the remaining 60% distributed to sub-divisions. The uniform performance bonus distributed to administrative departments equals 70% of the storage chip business sub-division level.
Under the new structure, if Samsung Electronics achieves 300 million billion won in annual operating profit, employees in the storage chip business unit could receive up to 5.5 billion won in performance bonuses. Combined with the existing annual bonus system (OPI), employees could receive up to 6 billion won in total bonuses, bringing pre-tax annual salary to approximately 7 billion won (approximately 31.3 million Chinese yuan). This salary level is seven times the average annual salary of employees at major Korean enterprises.
Voting Timeline and Process
The preliminary agreement began voting on the evening of May 20, with electronic voting scheduled to continue until 10 a.m. on May 27. Approximately 89,000 union members are expected to participate. The agreement becomes effective if more than half of all members participate in the vote and a majority supports it; otherwise, labor-management negotiations must resume.
Labor Market Implications
The semiconductor-focused bonus structure has drawn dissatisfaction from non-semiconductor divisions. According to reports, Samsung Electronics and SK Hynix have introduced a model allocating a percentage of operating profit as performance bonuses, potentially widening salary gaps between enterprises. Most industries outside semiconductor, shipbuilding, defense, and power equipment sectors find it difficult to implement such bonus distribution models.
Li Bing-hun, honorary professor of sociology at Chung-Ang University, noted that following Samsung Electronics' labor negotiations, calls across industries for additional performance bonuses from management have intensified, potentially exacerbating labor market polarization.
