Samsung workers set for $400,000 bonus after deal to share AI profits

{"text":[[{"start":8.3,"text":"Samsung Electronics workers have approved a landmark profit-sharing agreement that is expected to award employees in the booming memory chip division an average bonus of nearly $400,000."}],[{"start":20.25,"text":"The deal passed on Wednesday with 74 per cent of the company’s labour union voting in favour and ends months of wrangling over how to share the spoils of an AI-driven bonanza at the world’s largest memory-chip maker. The union had threatened to strike if a deal could not be reached."}],[{"start":38.15,"text":"Under the agreement, 78,000 semiconductor workers will be given 10.5 per cent of the company’s operating profit. This would amount to a bonus pool of more than Won34tn ($22.6bn) based on a forecast by brokerage KB Securities of Won327tn operating profit this year. This is on top of 1.5 per cent handed out through existing bonus schemes."}],[{"start":62.75,"text":"Samsung shares rose more than 7 per cent on Wednesday."}],[{"start":66.4,"text":"About 40 per cent of the chip bonus pool will be shared equally, while the remainder will depend on the performance of each business unit. Memory-chip workers are expected to receive Won600mn each, while those in the lossmaking contract chipmaking and logic semiconductor design businesses are likely to be given closer to Won150mn-Won200mn."}],[{"start":88.45,"text":"The deal follows a similar one struck at South Korean rival SK Hynix last year, in which workers were promised 10 per cent of operating profits for the next 10 years. This would mean an average bonus of Won710mn for each of SK Hynix’s 35,000 workers based on projections of Won250tn operating profit."}],[{"start":111.05000000000001,"text":"The two companies are benefiting from soaring demand for high-bandwidth memory chips used in AI systems. Samsung recently became the first South Korean company to achieve a $1tn market capitalisation. SK Hynix joined its compatriot on Wednesday, while US chipmaker Micron closed above the $1tn level in New York on Tuesday."}],[{"start":132.65,"text":"Unlike SK Hynix, Samsung is not a pure chipmaker. Workers in its DX division, which makes smartphones, televisions and other gadgets, will only receive about Won6mn in bonuses, according to a person close to the company."}],[{"start":145.9,"text":"The DX division is suffering weaker profitability because of Chinese competition and higher chip prices that have directly benefited Samsung’s semiconductor division."}],[{"start":155.35,"text":"Two separate Samsung labour unions came together to make the agreement with the company. A smaller third group, the Samsung Electronics Company Union, which is composed mainly of DX members, had requested a court injunction against it. "}],[{"start":null,"text":"

"}],[{"start":169.29999999999998,"text":"In a statement issued after the vote, Woo Ha-kyung, acting president of the National Samsung Electronics Union, one of the two groups that backed the deal, expressed regret over “the sense of exclusion felt by DX employees, as well as the dissatisfaction within DS [the semiconductor division] caused by differences in compensation”."}],[{"start":188.74999999999997,"text":"“DS also experiences downturns,” Woo said. “If the bargaining structure begins to fragment according to short-term business performance and divisional interests, our ability to support one another during future crises will inevitably weaken.”"}],[{"start":202.69999999999996,"text":"Samsung Electronics also relies on tens of thousands of subcontracted workers who are not directly hired by the company and not covered by the profit-sharing agreement."}],[{"start":213.04999999999995,"text":"South Korea’s labour market is often described as two-tiered, with unionised workers at conglomerates enjoying high wages and generous benefits, while employees at suppliers and subcontractors typically receive lower pay and lack job security."}],[{"start":228.89999999999995,"text":"Given the size of the bonuses, “public sentiment was already turning sour against the union and likely helped avoid the full strike”, said Peter Kim of KB Securities in a note on Tuesday."}],[{"start":240.79999999999995,"text":"The agreement has also drawn criticism from conservatives, who fear it could encourage similar demands at other South Korean companies. Workers at internet group Kakao, telecoms provider LG Uplus and drugmaker Samsung Biologics are demanding profit sharing. "}],[{"start":257.4,"text":"“The precedent set by the [Samsung deal] will spread to strikes across the entire industrial sector and ultimately erode our industrial competitiveness,” Song Eon-seok, a lawmaker from the main opposition People Power Party, said last week. “A tsunami of strike chaos is approaching.”"}],[{"start":283.49999999999994,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1779854580_3820.mp3"}