AI Profit Surge Fuels Bigger Bonus Demands at SK Hynix

The artificial intelligence (AI) memory industry is booming, and SK Hynix is seeing record profits, but employees are demanding that the company keep paying them more in cash instead of stock, even as they debate whether to allocate a greater percentage of payments to stock.

According to The Korea Herald, the company would meet with its labor union on Tuesday for a fifth round of wage talks at SK Hynix’s campus in Cheongju. The talks focus on the company’s profit-sharing bonus (PS) and how the bonus should be designed in the future following the record profits.

Union Pushes Back Against Stock-Based Bonus Proposal

The disagreement comes after SK Hynix reported a record operating profit of 60.54 trillion won ($41.6 billion) in the second quarter of 2026, an increase of 557% from the same period a year ago due to robust demand for high-bandwidth memory (HBM) chips in AI servers.

A labor agreement for 2025 guarantees 10% of the operating profit of the company to a performance bonus pool with no maximum amount. The bonus is divided into three payments, with 80% being given in the relevant year, 20% distributed in the next two years.

Under the formula, the average employee was awarded a performance bonus of approximately 140 million won ($108,000) from fiscal 2025 operating profit of 47.2 trillion won.

Analysts expect payouts to increase substantially if earnings continue to climb. Estimates cited by local financial media suggest annual operating profit could reach around 250 trillion won in 2026, potentially lifting the average bonus to roughly 700 million won ($477,000) per employee across the company’s workforce of approximately 35,000.

Management has proposed paying more than half of future PS awards in company shares subject to a mandatory holding period instead of cash, according to minutes from previous bargaining sessions released by the union.

The company reportedly argued that a more sustainable compensation system would better balance the interests of employees and other stakeholders while also maintaining a proposal to temporarily adjust wages during loss-making years.

The union, which said it would effectively be a rewrite of last year’s labor contract, rejected the proposal, saying it would leave employees vulnerable to stock prices. It has also stated that it will take more action if management is not prepared to offer a new proposal during the negotiation process.

The concern is in response to recent share price fluctuations of SK Hynix. In a recent trading day, company stock plummeted from a record high, but rallied by the daily trading limit after the opening of the day, reflecting the investment risk that employees would be exposed to should a higher percentage of their bonuses be issued in stock instead of cash.

Under the current program, employees will be able to purchase up to 10% to 50% of their PS through a voluntary conversion option, with a 15% cash premium after one year. The most recent offer is to move the majority of the annual performance bonus from cash to stock.

AI Boom Reshapes Industry Bonus Expectations

SK Hynix’s profit-sharing model has become a reference point across South Korea’s technology sector, with similar demands emerging at other large manufacturers.

At Samsung Electronics, union members have also sought a fixed profit-linked bonus structure. According to previous reports, the union has threatened industrial action unless its demands for a larger share of operating profits are met.

The contrast with recent years has been stark. Samsung’s semiconductor division paid no performance bonuses for 2024 after losses during the memory downturn, while SK Hynix also saw bonus payouts decline sharply before the AI-driven recovery restored profitability.

Public Debate Extends Beyond Labor Talks

The prospect of exceptionally large employee bonuses has also sparked public discussion in South Korea.

Posts on the anonymous workplace forum Blind questioned whether companies that benefited from government support should distribute more of their gains to the broader economy.

Some commenters argued that state assistance helped stabilize the semiconductor industry during the downturn, while others suggested directing a portion of the gains toward domestic consumption initiatives.

According to previous reports, SK Hynix and Samsung together received an estimated 20 trillion won ($13.6 billion) in tax incentives and low-interest financing under South Korea’s K-Chips Act over a two-year period.

In a separate statement, SK Hynix said its first-half 2026 revenue surpassed 100 trillion won for the first time in the company’s history, with long-term supply contracts with approximately 10 big customers and mass production and shipments of its next-generation HBM4 chips in the second quarter.