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

On Thursday, workers at South Korean memory chipmaker SK Hynix launched a new labour union aiming to unite employees from various job categories and locations, seeking greater bargaining power. The launch coincides with ongoing disagreements over annual wage talks between SK Hynix and its existing unions, following the company's announcement of record quarterly profits driven by robust demand for AI-related infrastructure.

Nearly 2,500 SK Hynix workers have joined the new union, officially recognized once the government approved its application. Unlike existing unions organized by specific job categories or workplaces, the new union intends to represent employees across all operations at SK Hynix, including factory workers in Icheon and Cheongju, as well as technical and office staff.

The union's primary objective is to become a majority union by enrolling more than half of the company's workforce, which would grant it greater influence in negotiations with management. Control over collective bargaining is crucial, as SK Hynix's last year's agreement with its union included allocating 10% of annual operating profit to employee bonuses in cash for ten years.

This year, SK Hynix proposed paying a majority of workers' bonuses in shares instead of cash, a move prompted by Samsung Electronics agreeing to similar terms earlier in the year. Social security law professor Park Ji-soon from Korea University's School of Law noted that the union's success in becoming the majority union could lead to competition among unions for membership.

He added that a shift towards stock-based bonuses might prompt unions to seek other benefits, such as housing loans comparable to those offered by rival Samsung Electronics.

Management professor Kim Yong-jin from Sogang University stated that while workers' concerns about stock compensation are understandable due to the volatility of Korean stocks, equity-based bonuses are common in the United States. In May, Samsung Electronics reached a deal with its unionized workers to avert a major strike, agreeing to allocate 10.5% of its annual semiconductor operating profit to special bonuses in company stock with restrictions on immediate sale.