Samsung faces first-ever majority labor union as burning resentment over bonuses drives membership

Samsung Electronics faces rapid union growth as engineers express dissatisfaction over bonus structures despite record profits, potentially leading to the formation of a majority labor union.

Unionized workers at Samsung Electronics call for negotiations with management in front of the company’s office building in Gangnam District, southern Seoul, on May 24, 2024. [YONHAP]

When Samsung Electronics posted record operating profits last year, many engineers in its semiconductor division expected their bonuses to rise with them. Instead, frustration over performance incentives has fueled a rapid expansion of union membership, putting Korea’s largest company on track to face its first-ever majority labor union.

A fifth-year engineer in Samsung Electronics’ semiconductor business joined the Samsung Electronics chapter of the National Samsung Electronics Labor Union (NSEU) in September last year. The decisive factor, the employee said, was longstanding dissatisfaction with performance-based compensation.

The engineer works in the memory business of the Device Solutions (DS) division. Excess profit incentives, or OPI, for the semiconductor division’s 2025 performance were set at 43 to 48 percent of annual salary. But employees say the payouts fall short of expectations, given that Samsung Electronics reported a record 20 trillion won ($13.5 billion) in operating profit in the fourth quarter.

That sense of disappointment has grown as workers compare their compensation with that of rival SK hynix, which is widely understood to distribute a fixed portion of operating profit as bonuses.

“When the semiconductor division declared zero performance pay in 2023, the downturn was so severe that I understood,” the engineer said. “But seeing the company hesitate to expand compensation even as an earnings surprise was expected pushed me to join the union.”

Members of the Samsung Group United Union, a cross-affiliate labor union of employees at the conglomerate, answer questions from reporters at a press conference for the union's launch at the Corea Conference Center in Seocho District, southern Seoul, on Feb. 19, 2024. [NEWS1]

As of Tuesday, Samsung Electronics appeared to be nearing the formation of its first-ever majority labor union.

Membership stood at 55,200 as of Monday, equivalent to about 42.6 percent of the company’s total work force of 129,524 as of the end of June last year, according to the Samsung Group United Union (SGUU), the conglomerate's cross-affiliate union. That represents a nearly ninefold increase from Sept. 1 last year, when the union counted just 6,300 members.

“We believe it will be possible to obtain majority union status as early as February,” said Choi Seung-ho, chair of the Samsung Group United Union Samsung Electronics Company Union.

The rapid growth has been driven primarily by the semiconductor division. Union membership there rose from 4,415 at the end of last September to 19,618 a month later, then surged again to 34,478 the following month. As of Thursday, 42,096 of the division’s 75,253 employees, or 55.9 percent, had joined the SGUU.

Members of the National Samsung Electronics Union hold a rally at Samsung Electronics’ Giheung chip campus in Yongin, Gyeonggi, on July 22, 2024, ahead of a general strike. [YONHAP]

Unionization has progressed more slowly in the Device eXperience (DX) division, where the membership rate stands at 23.8 percent.

An employee who works in a DX business unit said they chose not to join.

“It doesn’t seem like the union actively addresses issues specific to our department, such as unfair transfers,” the worker said. “[The union] publicizing membership numbers by business unit also seems to fuel internal resentment.”

Industry sources point to a turning point in September, when the cross-affiliate union visited SK hynix and interviewed former Samsung Electronics employees who had moved there. The SGUU described the visit as an opportunity to compare working conditions directly.

“It was difficult to find areas where Samsung Electronics could clearly claim to be better than SK hynix in terms of compensation or welfare,” the SGUU said.

A Samsung Electronics sign is seen at the company's office building Seocho District, southern Seoul, on Jan. 8, 2026. [NEWS1]

Samsung Electronics entered its fifth round of wage negotiations on Tuesday. A joint bargaining group formed by three unions — the SGUU, NSEU and the Samsung Electronics Labor Union — has called for greater transparency in how OPI is calculated and for the removal of the payout cap.

OPI is paid when a business unit exceeds its annual performance targets and can reach up to 50 percent of an employee’s annual salary, within 20 percent of the excess profit. Samsung Electronics calculates OPI using the Economic Value Added, or EVA, method.

The unions argue that EVA deducts corporate taxes and capital costs, including investment expenses, from operating profit, limiting how strong performance is reflected in bonuses. The company maintains that EVA offers a rational metric that balances shareholder value with long-term investment.

If negotiations break down, the SGUU plans to convene a general assembly later this month to discuss whether to strike. It is also considering forming a task force to share information on compensation systems, working conditions and job-switching cases at competitors such as SK hynix.

Should the cross-affiliate union secure majority status, it would gain the right to act as the sole bargaining representative, exercising exclusive authority over collective bargaining and working conditions. Still, analysts say sweeping changes are unlikely in the short term, given that wage negotiations involving the SGUU are already underway.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom. BY LEE YOUNG-KEUN [kim.juyeon2@joongang.co.kr]