SK Hynix Resolves Labor Dispute with 50-50 Cash-Stock Profit Sharing Agreement

SEOUL — SK Hynix Inc., the world's second-largest memory chipmaker, reached a crucial labor agreement with its union on Wednesday, resolving a wage dispute that threatened to disrupt memory supply chains critical to global AI development.

About 57% of the union labor group approved a revised wage and collective bargaining agreement. Following the announcement, SK Hynix shares rose over 2% in Seoul trading.

New Terms of the Agreement

The revised agreement adjusts the payout structure for profit-sharing bonuses, replacing a previously rejected management proposal.

50% Cash, 50% Stock: Under the newly approved deal, half of all profit-sharing bonuses will be distributed in cash and half in company shares. This replaces management's earlier 40-60 cash-stock split proposal, which included restricted stock that employees could not sell immediately.
10% Operating Profit Allocation: The deal maintains the 10-year framework established last year, allocating 10% of annual operating profits to employees without an upper cap.
Conditional Salary Deferral: Both sides agreed to a temporary 3% salary deferral if the company records a financial loss, with full pay restored once profitability returns.

  PROFIT-SHARING SPLIT REVISION [August Proposal - Rejected (50.08% No)] ├── Cash: 40% └── Stock: 60% (Included restricted stock) [September Revised Pact - Approved (57% Yes)] ├── Cash: 50% └── Stock: 50%

Securing the AI Memory Supply Chain

The resolution resolves two weeks of intense renegotiations after union members narrowly voted down the initial proposal in August.

As a primary supplier of high-bandwidth memory (HBM) chips to Nvidia Corp. and other major semiconductor manufacturers, maintaining uninterrupted operations at SK Hynix is vital for meeting global AI accelerator demand. The ratification removes labor uncertainty during a period of record profits across South Korea's semiconductor sector.

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