Workers threaten nationwide strike as conglomerate agrees to pay Rp7.3 billion
Jakarta — CNBC Indonesia. South Korea’s technology conglomerate Samsung Electronics finally conceded after receiving an ultimatum from workers threatening an 18-day industrial action. Some 48,000 workers in the Samsung union had initially planned to strike from 21 May 2026. The threat came after negotiations with Samsung, which had been mediated by the government on several occasions, reached a stalemate. Workers demanded a transparent salary and bonus scheme, based on company performance and operating profit.
The demand emerged as memory chip demand surged following a global shortage crisis. Samsung, the world’s largest memory-chip producer, had managed to reach a market capitalisation of US$1 trillion thanks to high demand. However, workers argued that business growth did not translate into better welfare for staff. The union called for removing the 50% cap on bonuses from annual pay and allocating 15% of annual operating profit to bonuses. They had asked for these changes to be formalised for more than a year.
Negotiations with Samsung were tough. Yet, the union and management eventually reached an agreement at the last minute. The mass walkout was postponed. Nonetheless, conditions, including a bonus package worth around US$416,000 (Rp7.3 billion) for some workers, sparked concerns, Reuters reported on Thursday, 21 May 2026.
The government-mediated deal will go to a vote between 22-27 May 2026. The union leader said he expects the deal to be ratified.
The deal offers relief for South Korea. A mass strike by Samsung workers could threaten the national economy and disrupt the global chip supply chain. Samsung accounts for around a quarter of South Korea’s export revenue. Disruption to its production could have a major impact.
Samsung’s shares and the KOSPI index both climbed nearly 8% on the opening of trading after the deal was welcomed by both the union and management.
Jumbo bonus raises investor concerns
A senior analyst at NH Investment & Securities, Ryu Young-ho, said investors are relieved by the postponement of the mass walkout. Yet, the deal is not instantly positive for investors. The jumbo bonus implies higher labour costs for Samsung. However, Ryu argued that paying performance bonuses in stock rather than cash could reduce the company’s immediate financial burden.
The union’s demand to allocate 15% of operating profit to bonuses was scaled back. Under the latest agreement, Samsung is expected to set aside around 10.5% of operating profit for a special bonus for the chip division, which covers memory and logic chips, according to the union.
A document shows that the bonus will be paid in company shares for at least ten years and will depend on meeting annual chip-division operating profit targets of more than 200 trillion won (Rp2,346 trillion) from 2026 to 2028, and 100 trillion won (Rp1,173 trillion) from 2029 to 2035.
For example, a memory chip worker with a base salary of 80 million won (Rp938 million) is expected to receive a bonus of around 626 million won (Rp7.3 billion) this year. The bonus would largely be paid in stock, according to an unnamed union source.
In a letter seen by Reuters, Jun Young-hyun, head of Samsung Electronics’ memory chip division, urged workers to end the conflict and unite to bolster global competitiveness and the company’s long-term growth.