Samsung Electronics shares rallies 6% after union suspends strike following tentative wage deal

Members of the Samsung Electronics labour union hold flags as they stage a mass rally demanding the removal of a cap on performance bonuses, outside the company's foundry and semiconductor factory in Pyeongtaek on April 23, 2026. (Photo by Jung Yeon-je / AFP via Getty Images)

Jung Yeon-je | Afp | Getty Images

Shares of Samsung Electronics jumped more than 6% on Thursday after its labor union suspended a planned 18-day strike late Wednesday, easing concerns over disruptions at the South Korean chipmaker.

The union had said the strike would proceed after the government-mediated talks collapsed on Wednesday. However, another round of negotiations led by South Korea's minister for labor and employment Kim Young-hoon resulted in a tentative agreement.

The gains in Samsung were also supported by optimism across semiconductor stocks after Nvidia reported another strong quarter overnight, with revenue surging 85% to $81.62 billion from $44.06 billion a year earlier.

Samsung's labor union said in a statement that the general strike was suspended, and all union members would participate in a vote from May 22 to 27 on the tentative wage agreement.

During a briefing streamed by government broadcaster KTV on YouTube, Kim emphasized that this was still a provisional agreement, and there is still a "long way to go before the final agreement."

He added there were various outstanding issues but the gap between the two sides had "narrowed considerably", adding that the union had made significant concessions.

According to South Korean media outlet Yonhap, the hugely profitable chip division would receive 40% of the total bonus pool, while the other business units would receive 60%. A contentious decision on how to divide bonuses among Samsung's loss-making divisions was deferred for a year, Yonhap reported.

Reuters reported that Samsung would allocate a special bonus equivalent to 10.5% of operating profits to its chip division, while accepting the union's demands to link bonuses to operating profits and abolish a bonus cap, citing a union negotiator and a document shared by the union.

Yonhap also reported that Samsung would partially fund the special bonuses with company stock over at least 10 years, contingent on the chip division exceeding operating profit targets of 200 trillion won ($133.65 billion) for 2026 to 2028. The target was lowered to 100 trillion won from 2029 to 2035, Reuters reported, citing the union document.

The union had earlier sought performance bonuses equivalent to 15% of Samsung's operating profit, the removal of bonus payout caps, and a formalized bonus structure, among other measures.

Rival SK Hynix agreed last September to a wage deal that will set aside 10% of operating profit as bonuses for its workers.

South Korean President Lee Jae Myung had earlier weighed in after the talks failed, saying in a cabinet meeting that while it was "understandable that some labor unions are working to secure their interests through their rights, there must also be an appropriate limit," without naming Samsung.

South Korean Prime Minister Kim Min-seok had estimated that the direct losses from the 18-day strike could reach 1 trillion won. The economic loss could rise to as much as 100 trillion won if chip production disruptions force Samsung to scrap semiconductor wafers already in production.

Samsung Electronics accounts for 22.8% of South Korea's exports and 26% of its total market capitalization, he highlighted. Seoul's presidential office also said Samsung Electronics revenue accounts for 12.5% of the country's GDP.

— CNBC's Lisa Kim and Blair Baek contributed to this report.