SK Hynix (SKHY.US) reaches agreement with labor union: profit-sharing bonus will be distributed as 50% cash + 50% stocks

According to Wise Finance APP, the world’s second-largest memory chip manufacturer, SK Hynix (SKHY.US), has reached an agreement with the labor union to pay half of the profit-sharing bonus in cash, thus resolving a dispute that could have disrupted its production. In a statement on Wednesday, SK Hynix announced that about 57% of the labor groups approved the revised wage and collective bargaining agreement. Under the latest agreement, 50% of the profit-sharing bonus will be paid in cash and the other 50% in company stock, replacing the previously proposed plan of 40% cash and 60% stock. The company’s share price rose more than 2% in the Seoul market.

This agreement alleviated internal tensions within the company. SK Hynix supplies high-bandwidth memory (HBM) to NVIDIA and other chipmakers, which is a key component in AI development accelerators. After roughly two weeks of renegotiations, the agreement was finally approved. Earlier, in August, union members had rejected an initial provisional agreement, with 50.08% voting against it.

The main sticking point was management’s proposal to convert a considerable portion of the profit-sharing bonus from cash to stock, including restricted shares that employees cannot sell immediately. The union initially opposed this, arguing it would undermine the profit-sharing framework agreed last year.

According to last year’s framework, SK Hynix agreed to remove the cap on profit-sharing bonuses and distribute 10% of annual operating profit to employees over 10 years. It is estimated that in 2026, the company’s employees could receive an average bonus of 779 million Korean won (about 547,000 US dollars) per person. As the booming semiconductor industry generates record profits, the scale and structure of such bonuses have become an issue of close attention not only for SK Hynix and its staff, but also throughout South Korea.

The two sides also agreed that if SK Hynix incurs a loss, employees will temporarily defer 3% of their salaries, and wages will return to full payment once business improves.