SK Hynix Tentative Wage Agreement Voted Down by Narrow Margin of 25 Votes for Production Workers, Passed by Office Workers

After two months of negotiations, SK Hynix management and labor unions reached a tentative agreement on wages and collective bargaining, but it was voted down by union members just five days later, sending both sides back to the negotiating table.

According to the industry today, the SK Hynix production workers' union announced that the electronic voting on the tentative agreement, which closed at 9 a.m. today, was voted down with 50.08 percent (7,535 members) casting ballots against it.

The approval rate stood at 49.92 percent (7,510 members), dividing the votes for and against by a mere 25-vote margin.

The voter turnout reached 93.81 percent, with 15,045 out of the 16,083 total production union members in Icheon and Cheongju participating.

The vote took place from 6 a.m. yesterday to 9 a.m. today, covering the tentative wage and collective bargaining agreement for 2026.

Although a majority of registered union members cast their ballots, a majority of the voters voted against it, leading to the rejection of the tentative agreement.

Separately, the technical and office workers' union wrapped up its voting this afternoon and passed the tentative agreement with an approval rate of 66.2 percent.

While the production workers' union rejected the tentative agreement, the office workers' union approved it, resulting in divided outcomes between the labor groups.

However, industry insiders believe that the passage by the office workers' union will have a limited impact on re-negotiations with the production union, given that the office workers have around 1,000 members—a stark difference in scale from the production union—and negotiations were conducted separately.

Consequently, SK Hynix and the production workers' union will re-coordinate their future negotiation direction.

Management and labor are expected to set future negotiation schedules and specific procedures through additional discussions soon.

Previously, SK Hynix labor and management reached a tentative agreement on the 20th featuring a 6.3 percent wage increase, along with distributing 40 percent of the Profit-Sharing (PS) bonus in cash and the remaining 60 percent in company stock.

Of the distributed stock, 40 percent can be sold in the corresponding year, while the remaining 20 percent is deferred and paid out at 10 percent per year over two years.

However, for the PS portion for 2026 to be paid out early next year, members were given the option to choose cash for the stock portion that is eligible for sale in the same year.

As a result, up to 80 percent of next year's payout can be received in cash.

The recent vote by the production workers' union was an ultra-tight race with a razor-thin margin between the yes and no votes.

Industry watchers interpret that significant dissatisfaction stemmed from the shift from the traditional cash-centric payout method to a partial company stock system, just one year after labor and management agreed last year to maintain the bonus payment system for a decade.

Concerns that the proportion of stock payments could expand in subsequent years, despite the option to receive up to 80 percent in cash for next year's payout in its first year of implementation, also likely drove the opposition.

Members reportedly found the possibility that actual compensation value could fluctuate depending on stock price movements to be a burden as well.

At the same time, support was substantial.

Analysts noted that positive evaluations were given to the 6.3 percent wage hike—which is higher than Samsung Electronics at 6.2 percent—the retention of the core framework of the existing bonus system such as eliminating the cap on PS financial resources, the option to receive up to 80 percent in cash for next year's payout, and strengthened welfare systems.

The SK Hynix production workers' union has precedent for reaching final agreements by re-negotiating with management after tentative wage agreements were voted down in both 2023 and 2024.
※ Please note: This article was translated by AI and may contain errors.