The Initial Industry Union, Samsung Electronics' largest labor union, is moving to reform its performance bonus system following a reorganization centered on the Semiconductor (DS) division. The union plans to finalize demands including improvements to loss penalties for System LSI (semiconductors) and Foundry (contract semiconductor manufacturing), which will be reflected in next year's wages and collective bargaining agreement.
According to the semiconductor industry on the 22nd, the Initial Industry Union Samsung Electronics branch will hold a member general assembly on the 6th of next month to vote on performance bonus-related demands. Key agenda items include an integrated company-wide demand for performance bonus distribution and demands to improve loss penalties for System LSI and Foundry business units. Approved measures will be incorporated into the "2027 Negotiation Demands."
This general assembly marks the first time since the Initial Industry Union reorganized around semiconductors that it will determine the direction of performance bonuses. During its extraordinary general assembly from the 16th to 19th, the union passed a bylaw amendment limiting membership eligibility to DS division workers with a 96.3% approval rate. Existing DX (Device Experience) division members are scheduled to be removed. Consequently, compensation and working conditions for semiconductor business units are expected to remain key issues in future negotiations.
Performance bonuses were also a central issue during the reorganization process. Disagreements persisted between the DS and DX unions over this year's bonus distribution method. The Donghaeng Union, centered on the DX division, demanded performance bonus distribution using company-wide resources, leading to divergence from the Initial Industry Union and withdrawal from the joint negotiation team. Within the DS division itself, dissatisfaction continued over compensation disparities based on business unit performance.
Previously, Samsung Electronics labor and management agreed in May to establish a special management performance bonus funded by 10.5% of the DS division's operating profit. No upper limit was set on the payout rate; 40% of the funds will be distributed equally across the DS division, while the remaining 60% will be allocated differently based on business unit performance. For loss-making business units, 60% of the DS-wide payout rate will apply, though implementation is deferred until next year with a one-year grace period. The broad framework, including payment via company stock repurchases, has been established, while detailed plans regarding payment timing and procedures are expected to be announced after the Chuseok holiday.
Especially since differential criteria for loss-making business units will take effect next year, compensation issues for System LSI and Foundry have emerged as core DS division concerns. According to an Initial Industry Union survey, the proportion of workers indicating intent to leave within the next two years was significantly higher in Foundry (81.5%) and System LSI (75.4%) compared to Memory (32.7%). The union believes performance bonus disparities between business units could lead to talent drain and plans to finalize demands for improving loss penalty structures at this general assembly, presenting them as key demands for next year's collective bargaining agreement.
Performance bonus issues are also expected to be addressed during next month's national audit. The National Assembly Industry, Trade and Energy Committee held a plenary session today and selected Choi Seung-ho of the Initial Industry Union Samsung ElectronicsJi Bu (Chairman) as a witness for the Ministry of Trade, Industry and Energy's national audit scheduled for the 6th of next month regarding issues such as Samsung Electronics' performance bonuses.
An industry official stated, "It is highly likely that detailed plans for special performance bonuses will be released after the Chuseok holiday, and with both the union general assembly and national audit scheduled for the 6th of next month, performance bonus issues are expected to resurface as a major agenda item. In particular, how to adjust performance bonus criteria for System LSI and Foundry will become the core issue in future negotiations."
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