Arabic version: نقابة سامسونج تعلق الإضراب بعد اتفاق مكافآت الذكاء الاصطناعي
The largest union at Samsung Electronics has suspended a planned strike after reaching a last-minute tentative pay agreement with the South Korean technology giant. This decision alleviates concerns about potential disruptions at the world’s largest memory chipmaker, particularly during a boom in the building of artificial intelligence (AI) data centers. According to BBC News, the industrial action was set to start on Thursday but will now be suspended while union members vote on the deal from May 22 to 27.
The dispute primarily revolves around the distribution of profits from the increasing demand for AI memory chips. Samsung had planned to pay generous bonuses to 27,000 staff making memory chips – at least six times more than its workers making other chips and electronics. The union raised concerns that 23,000 workers involved in producing less advanced chips for companies like Tesla and Nvidia should also benefit from the profits generated by AI demand.
Samsung’s operating profit in the January to March quarter jumped about 750% from a year earlier, driven by booming AI chip demand. The company has faced pressure from competitors like SK Hynix and Micron, which has intensified the need for a resolution. Last year, SK Hynix abolished its bonus pay cap for 10 years, leading to bonuses more than three times higher than those offered to Samsung employees, prompting some workers to leave for rival companies.
The union’s demands included abolishing a cap on bonuses and allocating 15% of annual operating profit to a bonus pool. Samsung’s management has acknowledged the potential economic impact of a strike, which could significantly affect sales and tax revenue in South Korea, where the company is a major economic player.
Following the announcement of the tentative agreement, Samsung’s shares rose by more than 6%, and South Korea’s Kospi stock index increased by over 7%. A South Korean court has also granted an injunction to prevent disruptions, emphasizing the importance of maintaining normal staffing levels for safety and production quality.
