SK Hynix Labor and Management, 'PS Conflict' Prolonged... Opposition Despite 1450% Proposal

Discussion Ahead of Fourth-Quarter Earnings Announcement on the 23rd
Record-High Operating Profit Expected
Labor and Management Clash Over PS Rate Selection
CEO Kwak Nojeong: "We Will Strive to Pay PS Within January, Before Lunar New Year"

On the 23rd, SK Hynix, which is expected to record the highest operating profit ever in its fourth-quarter (October to December) earnings announcement last year, is reportedly unable to reach an agreement between labor and management regarding the Performance Share (PS), drawing attention from the industry.

SK Hynix Yonhap News

According to industry sources on the 21st, SK Hynix management recently sent an email to employees stating their intention to pay PS at around 1450% of the base salary.

PS is a performance bonus system where SK Hynix allocates 10% of its annual operating profit as a fund to pay up to 1000% of the base salary to internal members. According to insiders, although 1000% is the maximum for PS, since the upcoming earnings announcement is expected to show record-high operating profit, labor and management are discussing an appropriate rate by adding special contribution bonuses to the 1000% and slightly increasing the total ratio to distribute the company’s profits as much as possible to its members. Previously, the company proposed a baseline of 1350% of the base salary to the union, but after backlash, it raised the rate to 1450%. However, the union opposed this proposal as well, so the labor-management dispute is expected to continue even after the earnings announcement. There is also keen interest in whether an agreement can be reached within this month. Earlier, SK Hynix CEO Kwak No-jeong stated at an employee communication event on December 11 last year that "we will strive to pay PS within January, before Lunar New Year."

Industry and securities analysts expect SK Hynix to record approximately KRW 23.4 trillion in annual operating profit in the upcoming fourth-quarter earnings announcement. This is the highest ever, far surpassing the KRW 20.84 trillion recorded in 2018, known as the semiconductor boom period. The fourth-quarter operating profit is expected to reach about KRW 8.021 trillion. Accordingly, the PS amount itself is also expected to reach the highest level ever.

This strong performance is largely attributed to SK Hynix’s focus on High Bandwidth Memory (HBM). SK Hynix plans to begin full-scale mass production of the 5th generation HBM, HBM3E 16-layer products, starting in the first half of this year. It is expected to provide samples to customers and accelerate related preparations. The 6th generation HBM4 is also scheduled to ship samples in June and begin full-scale mass production in October. SK Hynix has received requests from major customer Nvidia for rapid supply of HBM4.

This content was produced with the assistance of AI translation services.