Employees at SK Hynix Inc. (NASDAQ:SKHY) have rejected a proposed wage deal, prompting a resumption of negotiations.
On Tuesday, SK Hynix’s workers voted against a preliminary wage agreement that was reached after two months of discussions. The electronic vote saw 93.8% of the union’s members participate, with 50.08%, or 7,535 members, voting against the deal, reported Yonhap News Agency.
Both the management and the union are set to restart negotiations. The primary focus of the upcoming discussions is expected to be the performance-based incentive payment scheme, a significant sticking point in the previous negotiations. The union had also rejected tentative agreements in 2023 and 2024, leading to renewed discussions.
SK Hynix did not immediately respond to Benzinga’s request for comments.
Korean Chipmakers Navigate Labor, US Demands
Last week, SK Hynix and its union reached a preliminary agreement on a 6.3% wage increase and a revised structure for performance-based incentives, as per the report. Under the proposal, 40% of the incentive would be paid in cash and 60% in company shares. Of the stock portion, 40% would be available for sale in the year it is granted, while the remaining 20% would be deferred and distributed in 10% installments over the following two years.
This development comes in the wake of a similar situation at Samsung Electronics Co Ltd (OTC:SSNLF), where the labor union called off an 18-day strike following a last-minute wage deal in May. The strike, planned by nearly 48,000 union members, was canceled after negotiations on bonus payouts. The deal was subsequently put to a vote.
Meanwhile, U.S. officials reportedly urged South Korea and its chipmakers to accelerate investments in U.S. memory-chip production and secure stable supplies. The pressure intensified after Seoul unveiled its $578.5 billion Honam Semiconductor Mega Project, with Korean officials saying Washington’s main concern is delays in planned U.S. investments. The issue was also discussed during Trade Minister Kim Jeong-kwan’s U.S. visit, while Seoul maintains that the semiconductor demands are separate from last year’s $350 billion U.S. investment agreement.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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