Bonus Gap Ignites Samsung Civil War. Non-Chip Division Unions Seek to Halt Vote, TSMC Also Faces Bonus Cut Rumors?

TradingKey - Labor-management conflict within Samsung Electronics has escalated once again. The third-largest union, the "Donghaeng Union," has officially filed for a provisional injunction with the Suwon District Court in South Korea, seeking to halt the ongoing voting process for the 2026 provisional wage agreement.

The core of this dispute stems from the provisional wage agreement reached last week. Under mediation by the South Korean government, Samsung Electronics reached an agreement with its two largest unions—the Super Enterprise Union (Cho-Kiup) and the National Samsung Electronics Union (NSEU)—averting a planned 18-day strike.

The terms of the agreement include a 6.2% average wage increase, the establishment of a housing loan system of up to 500 million won, and a special operating performance bonus for the semiconductor division funded by 10.5% of operating profits.

However, this agreement has sparked significant controversy within Samsung Electronics. Based on an annual salary benchmark of 100 million won, memory chip business employees are expected to receive approximately 600 million won in performance incentives this fiscal year; bonuses for employees in "non-memory semiconductor" sectors, such as Logic LSI and Foundry, will be around 210 million won; meanwhile, employees in the Device eXperience (DX) division—covering smartphones, TVs, and home appliances—will only receive company stock worth approximately 6 million won. This stark compensation gap has directly led to strong dissatisfaction among employees in non-semiconductor departments.

Samsung shares rose more than 2% on Tuesday, bringing their cumulative gain to nearly 9% since the agreement was signed last week; however, performance still lags behind the 19% gain of competitor SK Hynix over the same period.

Internal union divisions

As Samsung's third-largest labor union, the Dong-haeng Union has approximately 13,000 members, primarily consisting of employees from the Device eXperience division. The union had participated in joint negotiations but withdrew from the "Joint Struggle Committee" after feeling its demands were not being addressed.

Currently, they have been excluded from the wage agreement vote, with the Super-Enterprise Union asserting that they have forfeited their voting eligibility.

Voting on the wage agreement commenced last Friday and is expected to conclude on the morning of May 27. As of Monday, the combined voter turnout from the Super-Enterprise Union and the National Samsung Electronics Union has reached 87.4%.

However, legal action by the Dong-haeng Union could fundamentally alter this process. If the court grants an injunction, the vote will be forced to a halt, and Samsung Electronics may once again face the risk of a strike.

The impact of this labor dispute has transcended the corporate level, garnering attention from the global semiconductor industry.

Samsung Electronics is the world's largest supplier of memory chips. In the first quarter of 2026, its operating profit surged 756% year-on-year to 57.2 trillion won, exceeding the total profit for the entire year of 2025.

Should a large-scale strike break out, it could not only affect Samsung's own production and delivery but also further drive up memory chip prices, impacting the global AI industry and electronics supply chain.

Notably, this is not the first time Samsung Electronics has faced internal wage equity issues. Previously, employees at subsidiaries such as Samsung Electro-Mechanics and Samsung SDI have also expressed dissatisfaction over significant disparities in compensation.

Dividend Controversy Rattles TSMC?

Meanwhile, the impact of the Samsung strike appears to be spilling over, and the global foundry leader TSMC ( TSM) has also seen reports of "unstable morale" internally.

Recently, reports in TSMC-related Facebook groups suggested that the company plans to cut annual employee bonuses distributed this July by 15% to 20%, which has sparked strong dissatisfaction among some employees, with some even calling for a strike following the example of Samsung Electronics.

To consolidate its leading position in 2nm and A14 (1.4nm) process nodes, the company is accelerating capacity expansion, with 12 fabs currently under construction simultaneously.

TSMC announced at its latest earnings call that its 2026 capital expenditure guidance is $52 billion to $56 billion, a significant increase from $40.9 billion in 2025, leading to outside speculation that massive infrastructure investments might be one of the reasons behind the bonus cut rumors.

TSMC CEO C.C. Wei previously stated that the company's current performance bonuses are too high and called for a reduction of approximately 20% to 30%.

Industry analysts pointed out that if TSMC becomes embroiled in labor disputes, the global economy could face a significant impact.

Consequently, TSMC took swift action to calm the situation, issuing an emergency statement on Monday clarifying that employee bonuses have not been reduced and that the bonus growth rate for this full year will exceed last year's. The company also emphasized that it will further increase investments in social sustainability projects to fulfill its corporate social responsibility.

It is worth noting that while TSMC has an employee welfare committee, it has not established a labor union similar to Samsung's, which makes initiating actions such as strikes somewhat difficult.