Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Feud deepens between Samsung's device, chip divisions over incentives
A member of the National Samsung Electronics Union lays a flower before a board reading, "May Samsung Electronics' Device Experience Division rest in peace," during a protest against the company at its plant in Suwon, Gyeonggi Province, Tuesday. Yonhap
By Nam Hyun-woo
The feud between Samsung Electronics' device-making and chipmaking divisions is deepening, as employees in the smartphone and home appliance businesses are expressing anger over a nearly 100-fold compensation gap between them and employees in the chipmaking division.
Samsung Electronics Company Union (SECU), which is mostly comprised of employees in the appliance-making Device Experience (DX) division, will hold a rally under a "same company, same rights" slogan at the company’s plant in Suwon, Gyeonggi Province on Thursday to protest the compensation gap between the divisions and urge management to address the issue.
SECU became the company's second-largest labor union after a large number of DX division employees joined in protest against a wage agreement reached in May, under which only employees in the chipmaking Device Solutions (DS) division were granted performance incentives of up to 600 million won ($402,900). As of Wednesday morning, the union had 28,569 members, accounting for roughly 55 percent of the DX division's workforce of 51,700.
A day earlier, the National Samsung Electronics Union, which has 22,700 members, set up a memorial altar at the Suwon plant, calling it "the day the DX division was confirmed to have been abandoned by management and declared dead."
The union argued that Samsung Electronics was able to grow in the past because operating profits generated by the DX division served as a common financial resource for investment in the chipmaking business. However, employees in the DX division have now been excluded in the distribution of performance incentives when the chip industry is booming, the union said.
Members of the National Samsung Electronics Union and the Samsung Electronics Company Union hold a rally at the company's plant in Suwon, Gyeonggi Province, May 22, as they protest a wage agreement that mostly benefits chipmaking Device Solutions division employees. Yonhap
Although Samsung Electronics' DX and DS divisions have been operated as separate organizations within the same company, the recent wage agreement is strengthening the silo mentality between the two divisions.
In the wake of an unprecedented memory chip upcycle, the company posted 57.2 trillion won of operating profit in the first quarter of this year, with the DS division accounting for 53.7 trillion won.
Based on the results, the wage agreement granted DS division employees, particularly those in the memory business, performance incentives of up to 600 million won. By contrast, employees in the DX division will receive compensation worth around 6 million won, including treasury shares, sparking controversy over the widening compensation gap.
The Samsung Electronics Labor Union (SELU), which is mostly comprised of DS division employees and spearheaded the wage agreement, is also seeking separate collective bargaining for the DS Division.
Recently, SECU proposed joint bargaining with SELU for the 2027 wage negotiations, but the latter effectively rejected the offer.
SELU leader Choi Seung-ho said in a recent statement that the union would seek to have the DS division negotiate separately and, if that proves unsuccessful, would pursue independent negotiations to secure better outcomes for DS employees. The union has since launched a DS Division Policy Committee, which is holding separate talks with the company.