SK Hynix’s Korean workers launch unified union amid stalled wage talks

SEOUL - Nearly 2,500 employees at South Korea's leading memory chipmaker, SK Hynix, have formed a new unified labour union as wage negotiations stall. The launch of the new union aims to unite workers across various job categories and locations, ultimately seeking greater bargaining power within the company. The union's formation follows the chipmaker's record quarterly profits driven by surging demand for artificial intelligence infrastructure.

Unlike existing unions, which are often organized by specific job categories or workplaces, this new union seeks to represent all employees within SK Hynix's operations, including factory workers in Icheon and Cheongju, as well as technical and office staff. The primary objective of the new union is to become a majority union by securing the support of over half of the company's workforce, thereby enhancing its influence in negotiations with management.

Control over collective bargaining is crucial for the new union, as it would enable it to exert greater influence over the company's decision-making processes. Meanwhile, SK Hynix has recently proposed shifting a majority of workers' bonuses from cash to shares, a move that follows a similar arrangement agreed upon by Samsung Electronics earlier this year.

Social security law professor Park Ji-soon from Korea University noted that the move could prompt competition among unions for membership, as gaining majority status is crucial for securing control over collective bargaining.

Kim Yong-jin, a management professor at Sogang University, acknowledged the workers' concerns regarding stock compensation, particularly given the volatility of Korean stocks. However, he pointed out that equity-based bonuses are a common practice in the United States. Investors have questioned whether allocating 10% of operating profit to employees could limit funds available for investment or shareholder returns.

In May, Samsung Electronics reached an agreement with its unionized workforce, securing a deal that allocated 10.5% of its annual semiconductor operating profit to special bonuses paid in company stock. The bonus payments would be subject to a restriction on the immediate sale of over a majority of the shares.