SK Hynix stock dropped 4.9% to ₩1,611,000 on Tuesday after its union members narrowly voted down a tentative wage agreement.
The result was close. Of the 15,045 workers who cast ballots, just 50.08% voted against the deal. The margin was 25 votes.
The rejected agreement, reached last week, included a 6.3% wage increase. It also revised the company’s profit-sharing bonus structure to pay 40% in cash and 60% in company stock.
That bonus structure was the sticking point. Some workers pushed back against receiving more than half their bonuses in stock, citing concern about share price volatility.
SK Hynix stock hit a record high in June, driven by enthusiasm around artificial intelligence demand. It has since pulled back on fears that AI spending may not be delivering enough return.
Under an existing agreement from last year, 10% of SK Hynix’s annual operating profit is set aside for profit-sharing bonuses. That system is in place for 10 years.
Currently, 80% of those bonuses are paid in cash in the year they are awarded. The remaining 20% is deferred over two years.
Management’s proposal to shift toward more stock-based payments ran into resistance from workers who wanted to keep a larger portion in cash.
SK Hynix was not immediately available for comment when Reuters reached out.
The situation draws comparisons to Samsung Electronics, which settled a similar dispute earlier this year.
In May, Samsung and its unionised workers agreed on a performance pay deal that averted a threatened strike. Samsung agreed to allocate 10.5% of its annual semiconductor operating profit to special bonuses for chip workers.
Those bonuses would be paid in company stock, though most could not be sold immediately.
Both Samsung and SK Hynix have been under scrutiny over profit-sharing plans this year, after both companies posted strong earnings from AI-driven demand for memory chips.
Samsung’s own profit distribution announcement earlier this week disappointed markets, pulling both Samsung and SK Hynix stock lower on Monday.
SK Hynix is the world’s second-largest memory chipmaker and has been a major beneficiary of demand for high-bandwidth memory chips used in AI hardware.
The broader South Korean market also came under pressure on Tuesday. The KOSPI fell around 3%, with chip stocks particularly affected.
Sentiment across the sector was already cautious ahead of Nvidia’s earnings report due later this week, which is seen as a key read on AI chip demand.
SK Hynix stock was trading down 4.9% as of 0036 GMT, compared with a 2.2% decline in the KOSPI at that time.
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