South Korea’s SK Hynix union approves tentative wage deal with management

[SEOUL] SK Hynix’s South Korean union has approved a tentative wage agreement with management, the chipmaker said on Wednesday (Sep 16), ending weeks of uncertainty after workers narrowly rejected an earlier deal.

The agreement is expected to formally conclude 2026’s wage and collective bargaining negotiations at the world’s second-largest memory chipmaker.

“We thank the labour union and our employees for working with us throughout this challenging process,” SK Hynix said in a statement.

The revised agreement won the backing of 57.1 per cent of voting union members, with 8,731 votes in favour, SK Hynix added, covering members of the production workers’ union at its sites in the cities of Icheon and Cheongju.

The company said it expanded employee choice over how performance bonuses are paid, following roughly two weeks of talks after workers rejected the Aug 20 deal, forcing negotiators back to the bargaining table.

The revised deal boosts to 50 per cent from 40 per cent the share of profit-sharing bonuses paid in cash, with the portion paid out in company shares reduced to 50 per cent from 60 per cent, the company said.

Employees can also choose to convert the cash portion into shares in increments of 10 percentage points, to get their entire performance bonus in stock, SK Hynix said.

The August deal called for a 6.3 per cent wage increase and a major overhaul of the company’s profit-sharing payout structure, with 40 per cent of bonuses paid in cash and 60 per cent in treasury shares.

But it was opposed by some workers who said bonuses should continue to be paid primarily in cash.

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SK Hynix reported record second-quarter operating profit of 60.54 trillion won (US$44.19 billion) as demand for AI-related memory chips boosted earnings.

The compensation framework allocating 10 per cent of operating profit to employee profit-sharing bonuses was hailed as a landmark labour agreement when introduced.

But it became contentious after management proposed paying a larger share of bonuses in stock rather than cash.

This week’s agreement also formalises a wage-deferral mechanism in the event of losses.

This measure reflects a commitment by labour and management to share responsibility during difficult business times while sharing the benefits of strong performance, the company added. REUTERS