A government-mediated agreement has suspended an 18-day walkout by about 48,000 Samsung union members, easing fears of damage to South Korea's economy and global chip supply.
Samsung Electronics shares surged on Thursday (21 May) after the company clinched an 11th-hour deal with its South Korean union to avert a huge walkout, although terms including bonuses of about $416,000 for some workers raised concern.
The planned 18-day strike by about 48,000 union members has been suspended while the agreement, mediated by the government, goes to a vote from Friday (22 May) to Wednesday (27 May). The union's leader has said he expects it to be ratified.
The deal brought relief across South Korea, where Samsung accounts for about a quarter of exports. The planned strike had been expected to inflict significant damage on the economy and dent global chip supply if it went ahead.
Samsung's shares and the benchmark KOSPI both rocketed nearly 8% higher in morning trade as investors reacted to the suspension of the industrial action. The scale of the union involved made the threatened stoppage a major test for the company and for South Korea's export-dependent economy.
Ryu Young-ho, a Senior Analyst at NH Investment & Securities, said investors were relieved that the strike appeared to have been averted. He also said the agreement was not entirely positive because it had resulted in substantially higher labour costs.
The planned walkout would have involved workers at a company whose chip division houses its memory and logic chip businesses. Any disruption at Samsung had been expected to draw attention across the global semiconductor supply chain.
Samsung may face a lower immediate financial burden because performance bonuses are planned mostly in stock rather than cash, Ryu said. A union demand that 15% of operating profit be allocated towards bonuses was also pared back during the talks.
Under the agreement, Samsung is expected to set aside about 10.5% of operating profit for special bonuses for the chip division, according to the union. A document showed the bonuses would be paid in company stock for at least 10 years.
The payments are conditional on the chip division achieving more than 200 trillion won ($135 billion) in annual operating profit from 2026 to 2028 and 100 trillion won from 2029 to 2035.
A memory chip worker with a base salary of 80 million won (around $53,000) is expected to receive a bonus of about 626 million won, or $416,000, this year, mostly paid in stock, a union source said, declining to be identified.
Samsung Electronics chip division chief Jun Young-hyun urged staff in a letter seen by Reuters to leave behind the conflict and unite to strengthen the company's global competitiveness and long-term growth.
Azerbaijan is prepared to chair the Commonwealth of Independent States (CIS) in 2028, the country's President Ilham Aliyev has said. He made th...
U.S. federal immigration agents shot and wounded a man in a car with a five-year-old boy inside in New York City’s Bronx neighbourhood on Thu...
Several powerful explosions reported in the south of the Strait of Hormuz on Thursday may have been triggered by oil tankers hitting naval mines, I...
Russia struck Ukraine overnight in one of the biggest attacks of the conflict, killing at least 19 people, Kyiv's Foreign Ministry said on Wednesday. Around 70 missiles were fired at Ukraine during the attack, as well as drones, the Ministry said.
The Saudi-led coalition says it has carried out a series of military operations against Houthi targets in Yemen after attacks on two Saudi airports left three people dead and dozens injured.
Azerbaijan and the five Central Asian states have signed two key documents at the 8th Consultative Meeting of Heads of State in Turkmenbashi, formalising a broader framework for regional cooperation in transport, trade, energy, digitalisation and security.
Azerbaijan is prepared to chair the Commonwealth of Independent States (CIS) in 2028, the country's President Ilham Aliyev has said. He made the remarks as regional leaders met at the CIS Council of Heads of State meeting in Awaza, Turkmenistan.
It started with classrooms. Too many students, not enough teachers, deteriorating buildings and growing anxiety over what comes after high school. But within weeks, a movement that began outside French lycées had spread across the country.
Uzbekistan and Russia have a portfolio of more than 200 joint projects worth almost $6 billion, as the two countries continue to expand regional and business ties. The projects were discussed during the third meeting of the Council of Regions of Russia and Uzbekistan, held in Fergana, Uzbekistan.
In the marshlands of Malluba in southern Azerbaijan, Kamil Mammadov follows a routine that has been passed down through generations. His family has worked with medicinal leeches for centuries, harvesting and breeding a species known as Hirudo orientalis, or the Caucasian medicinal leech.
Baku is hosting the second Azerbaijan International Investment Forum (AIIF 2026) and it’s attracting more interest this year, Azerbaijan’s Deputy Prime Minister told AnewZ. “The agenda is very impressive. More guests, more interest,” he said.
Warren Buffett has stepped down as chairman of Berkshire Hathaway, marking the end of one of the most influential leadership tenures in corporate history and completing a succession process that has been years in the making.
Nigerian billionaire Aliko Dangote launched Africa's biggest-ever share sale on Monday, opening the oil refinery that has remade the country's fuel market to public ownership for the first time.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment