Samsung Electronics has averted a potential strike at its memory chip division after reaching a landmark profit-sharing agreement that will see employees receive bonuses averaging about £310,000 each. The deal underscores the impact of the artificial intelligence (AI) boom on chipmakers' profits.
Deal Details and Voting Results
On Wednesday, two unions representing workers at the world's largest memory chipmaker announced that 74% of the 62,616 employees who cast votes supported the agreement. The deal, mediated by the South Korean government, will allocate 10.5% of operating profits from Samsung's semiconductor division to special bonuses for chip workers, ending a bitter five-month dispute.
According to a union source cited by Reuters, a memory chip worker with a base salary of 80 million won ($53,400) is expected to receive a bonus of approximately 626 million won ($416,000 or £310,000) this year, mostly in stock. Bloomberg estimates that chip workers will receive an average of 513 million won ($340,000 or £250,000). Samsung employs around 78,000 people in its semiconductor division, which includes memory chips, contract chipmaking, and chip design services.
Potential Tensions Within Samsung
The generous bonuses for chip workers may create tensions within Samsung, as employees in other divisions, such as consumer electronics, are likely to receive much smaller bonuses in comparison.
AI Boom Drives Chip Demand and Profits
The surge in demand for memory chips from AI data centers has led to a chip shortage, enabling vendors to raise prices sharply and boost profits. This boom has propelled the market value of memory chip firms SK Hynix and Micron above the $1 trillion mark for the first time.
Shares in South Korea's SK Hynix rose over 9% on Wednesday, pushing its market capitalization above $1 trillion. On Tuesday, Micron's stock price jumped 19%, crossing the $1 trillion threshold after UBS analysts tripled their price target. Micron helped lift the tech-focused Nasdaq index to a new record high on Tuesday evening, while SK Hynix drove South Korea's KOSPI index to a fresh peak on Wednesday. The MSCI broadest index of Asia-Pacific shares outside Japan also hit a record high.
Anna Macdonald, an investment strategy director at Hargreaves Lansdown, said these moves reflect "a broader shift in the AI trade. Investors are looking beyond graphics processors to memory chips, which are essential for storing and moving the vast amounts of data AI systems rely on."
