South Korea's SK Hynix union approves tentative wage deal with management, source says

SEOUL: Chipmaker SK Hynix’s South Korean union has approved a tentative wage agreement with management, a source familiar with the matter said on Wednesday, ending weeks of uncertainty after workers narrowly rejected an earlier deal.

The revised agreement won the backing of 57.1% of voting union members, with 8,731 votes in favour, the source said.

The vote covered members of the company’s production workers’ union at its Icheon and Cheongju sites.

The approval comes after workers rejected an initial tentative agreement reached on August 20, forcing management and labour representatives back to the bargaining table.

Under the revised deal, the share of profit-sharing bonuses paid in cash will rise to 50% from 40%, while the portion paid in company shares will be reduced to 50% from 60%, the source said.

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

Samsung, SK Hynix reject KEPCO’s $19 billion power prepayment proposal, document shows

The original tentative agreement reached in August called for a 6.3% wage increase and a major overhaul of the company’s profit-sharing payout structure, under which 40% of bonuses would be paid in cash and 60% in treasury shares.

That proposal drew opposition from some workers who argued bonuses should continue to be paid primarily in cash. SK Hynix reported a record 60.54 trillion won ($44.19 billion) operating profit in the second quarter as demand for AI-related memory chips boosted earnings.

The compensation framework, which allocates 10% of operating profit to employee profit-sharing bonuses, was hailed as a landmark labour agreement when it was introduced, but became contentious after management proposed paying a larger share of bonuses in stock rather than cash.

SK Hynix did not immediately respond to a request for comment.