SK Hynix Pursues Additional Performance Bonus Talks with Union as Union Holds Second Rally

Employee Communication Event Held in Icheon
"We Regret Not Narrowing the Gap Between Labor and Management"
Union Demands Full Payment of 10% Operating Profit as Bonuses
Second Rally Held... Industry Watches for Possible General Strike
Presiden

SK Hynix, which has been experiencing difficulties with its labor union over performance bonuses, announced on August 12 that it is "currently negotiating the excess profit-sharing (PS) rate, excluding the wage increase rate, and intends to hold additional negotiations regarding the portion exceeding 1,700%." PS is an incentive paid once a year based on annual performance, up to a maximum of 50% of annual salary (1,000% of base salary).

SK Hynix Icheon Headquarters Building Yonhap News

According to industry sources, Shin Sangkyu, Executive Vice President in charge of Corporate Culture at SK Hynix, responded to a question about the company's position on the ongoing wage negotiations during the "Together THE Communication Event" held at the Icheon campus that afternoon. He stated, "We have held more than ten rounds of negotiations, but unfortunately, we have not been able to narrow the gap between labor and management, and the talks have broken down."

Between May and July, SK Hynix labor and management held a total of ten wage negotiation sessions but have yet to reach an agreement and remain at odds. On August 6, the union held its first-ever "All-out Struggle Resolution Rally" at the Cheongju campus, and on this day, the second rally was held at the Icheon campus. The union's core demand is for "the full 10% of operating profit to be paid out as performance bonuses."

Previously, SK Hynix achieved its highest-ever performance last year, posting an operating profit of 23.4673 trillion won. As a result, at the beginning of this year, the company paid PS equivalent to 1,500% of base salary and awarded 30 shares of company stock to employees as a form of encouragement. However, the union insists that, according to a clause agreed upon in 2021, "10% of operating profit must be used as the source for performance bonuses," and therefore the entire 10% of operating profit should be paid out as bonuses.

At the 10th round of negotiations at the end of last month, management proposed raising the PS standard from the existing 1,000% to 1,700% plus an additional amount, and suggested further discussions on the size and method of payment for the portion exceeding the limit. However, the union rejected this proposal, resulting in a breakdown in negotiations. Industry watchers believe that if the current standoff continues, there is a possibility that the union may go on a general strike.

Meanwhile, Kwak Nojeong, President and CEO of SK Hynix, hinted at the possibility of expanding DRAM capacity during the communication event. Regarding DRAM capacity, President Kwak stated, "Our competitiveness has improved significantly compared to the past, but it seems that securing additional capacity is still necessary. Focusing more on DRAM than NAND has been effective, and we have also benefited from the surge in demand for DDR4."

Regarding U.S. tariffs, he said, "This is an issue at the national level rather than for individual companies, so we intend to approach it through joint negotiations with our government. We are effectively communicating our position to the United States through relevant organizations, and we are also aiming to begin HBM production at the Indiana package fab by 2028."