Workers at South Korea's Samsung Electronics approved a wage agreement on May 7, 2025, averting a potential strike that could have disrupted global chip supplies and dented the country's economy.

The deal comes amid booming demand for chips used in artificial intelligence (AI) data centers, which has driven record profits. Samsung's first-quarter operating profit surged roughly 750% year-on-year, and its market capitalization topped $1 trillion for the first time this month.

The government-mediated agreement covers about 78,000 employees, more than 60% of the company's workforce, who will each be eligible for a bonus of roughly $370,000 (€317,904) this year.

Nearly 74% of over 62,000 union members voted in favor, partly because workers at rival chipmaker SK Hynix received bonuses more than three times larger than those paid by Samsung last year, according to Samsung's union.

Under the agreement, Samsung will introduce a new 10-year performance bonus system for semiconductor workers, alongside an average 6.2% wage increase. However, workers in other divisions say the deal disproportionately favors semiconductor employees.

A smaller union representing consumer electronics workers has sought a court injunction to block the agreement. Meanwhile, an exclusive Reuters report said Samsung Electronics plans to invest $1.5 billion to build its first semiconductor testing plant in Vietnam, with construction already underway and operations expected to start in November 2027.

Source: www.dw.com