Summary of Key Points
Samsung Electronics experienced a significant surge in performance in the second quarter (sales increased by 129% year-on-year, and profits increased by 1810%), but internal divisions arose due to uneven bonus distribution among its employees. The semiconductor division, particularly the memory chip sector, saw employees receive substantial bonuses (with the highest average bonus amount reaching approximately 3.4 million RMB per person), while employees in non-chip sectors such as mobile phones and home appliances received only around 33,000 RMB per person, resulting in a disparity of over 100 times. Unions representing non-chip sectors plan to hold protests, while management is attempting to appease them by offering stock bonuses. However, experts believe this is merely a temporary solution; the root issue lies in the distribution system favoring profit-making departments.
1. The Secret Behind the Surging Performance: Memory Chips Entering a “Golden Age”
Why was Samsung’s performance so strong in the second quarter? The key factor is the “super cycle” of memory chips. Simply put, with the explosion of AI technology, large models and data centers have an increased demand for storage capacity, driving up the demand and prices of memory and flash chips. As the world’s largest manufacturer of memory chips, Samsung reaped substantial benefits: sales soared from 74.6 trillion KRW (approximately 410 billion RMB) in the same period last year to 171 trillion KRW (about 940 billion RMB), and profits increased from 4.6 trillion KRW (about 25 billion RMB) to 89.4 trillion KRW (about 490 billion RMB), a 18-fold increase! It’s like a water seller suddenly becoming very profitable in the desert.
2. A Bonus Disparity of 100 Times: Why Are Employees from Non-Chip Sectors So Angry?
Good performance is usually a positive, but the bonus distribution has caused dissatisfaction among non-chip sector employees. The disparity is as follows:
- Memory Chip Sector: Average expected bonus of approximately 620 million KRW (≈3.4 million RMB per person);
- Wafer Manufacturing Sector (the loss-making part of semiconductors): Average bonus of 190 million KRW (≈1.05 million RMB per person);
- Non-Chip Sectors (mobile phones, home appliances, etc.): Only 6 million KRW (≈33,000 RMB per person).
That’s a 100-fold difference! It’s like someone using their year-end bonus to buy a house, while others can only afford a mobile phone. What adds to the anger is that the bonuses for the semiconductor sector are a special performance incentive, consisting of 10.5% of the company’s annual profits in stock and 1.5% in cash, distributed over a period of 10 years. With nothing for non-chip sector employees, it’s no wonder they plan to gather 2,000-3,000 people at the headquarters on July 16th to protest.
3. Divisions Within the Unions: Who Is Driving the Benefit Distribution?
Samsung’s unions are not unified; instead, they are divided into several groups based on departmental affiliations. The Super Enterprise Union (with 72,000 members, mainly from the semiconductor sector) is leading the salary negotiations and has significant influence, pushing the bonus plan in their favor. The Peer Unions (with 13,000 members, 70% from non-chip sectors), which were previously negotiating together with the Super Enterprise Union, withdrew after realizing their opinions were ignored. In other words, employees from profit-making departments have more say, while those from non-profit-making sectors feel marginalized—similar to a class where top students make the rules that only benefit them.
4. Management’s Stock Bonus Offer: Can It Solve the Problem?
In response to the protests, Samsung management quickly offered 1.0834 million shares (worth approximately 1.5 billion RMB) to nearly 50,000 non-chip sector employees, averaging about 7 million KRW (≈31,000 RMB per person). However, experts argue this is just a temporary fix:
- This amount is negligible compared to the bonuses received by the semiconductor sector;
- The fundamental issue remains unchanged: the special bonus system for the semiconductor sector will continue to widen the gap between departments as long as memory chips continue to generate profits.
It’s like giving a child a candy to stop their crying, but not addressing the reason for the tears—non-chip sector employees want a fair distribution system, not just a small token of appreciation.
5. Comparing with SK Hynix: Where Does Samsung Fall Short?
SK Hynix, a competitor, approached the situation more wisely by signing a 10-year agreement with its unions in 2025 to remove bonus caps and distribute 10% of annual operating profits to all employees, regardless of whether they work in the semiconductor or non-semiconductor sectors. This ensures that everyone benefits from the company’s profits. Samsung, on the other hand, offers separate bonuses only to the semiconductor sector, excluding non-chip employees. It’s like two companies: SK Hynix is sharing the cake equally, while Samsung is giving most of it to a few, naturally leading to more conflicts.
Conclusion
The core issue at Samsung is the imbalance in benefit distribution between profit-making and non-profit-making departments. While AI has boosted memory chip sales and profits, the real challenge for management is to find a way to share these benefits fairly among all employees, rather than granting substantial bonuses to a few. Offering stock bonuses may temporarily calm tensions, but long-term, a new distribution system must be established to prevent further internal conflicts. After all, the stability of a company depends on the acceptance of all its employees.