u/callsonreddit

Source: https://finance.yahoo.com/sectors/technology/articles/samsung-reaches-tentative-union-deal-143042907.html

In a last-minute reversal, Samsung Electronics Co. reached a tentative deal with its labor union, averting a potentially crippling strike that had been scheduled to start Thursday at the world’s largest memory chipmaker.

The South Korean company said in a statement late Wednesday that “labor and management have reached a tentative agreement on wages and the collective bargaining agreement.” The company’s union also confirmed suspension of plans for a strike that had been planned for May 21 to June 7. Samsung’s stock rose about 5% in pre-market trading on Nextrade.

The news follows days of back-and-forth brinkmanship and high-pressure negotiations. On Wednesday morning, labor leader Choi Seung-ho said the work stoppage would go ahead after Samsung’s management rejected a proposal from government mediators that the union had accepted.

Korea’s government — deeply invested in the outcome because of Samsung’s importance to the country’s economy — made one last appeal as Labor Minister Kim Young-hoon called the two sides together for evening talks. About 90 minutes before midnight local time, the parties reached a tentative deal.

Under terms of the proposal, Samsung will begin a special performance bonus system that would reward workers in the semiconductor division based on profitability. The 10-year bonus scheme will include ambitious profit targets of 200 trillion won ($133 billion) per year from 2026 to 2028, and 100 trillion won from 2029 to 2035.

Samsung’s union told members they will be able to vote on the proposed 2026 wage agreement from 9 a.m. on May 23 to 10 a.m. on May 28.

Global Supplier

The truce averts what could have been a damaging strike for Samsung and the tech industry. The Korean giant is the world’s biggest supplier of the memory chips that go into everything from smartphones and electric vehicles to the AI data center servers that power services like ChatGPT and Claude. Shortages in the memory chip sector have already driven prices sharply higher in recent months, and disruptions at Samsung could have exacerbated it.

The strains between management and labor showcased simmering tensions across the country as workers push for a greater share of the profits that companies like Samsung and SK Hynix Inc. are deriving from a global AI infrastructure boom.

The union had earlier demanded that Samsung scrap an existing bonus cap, allocate 15% of its operating profit to worker bonuses and formalize those terms in employment contracts. Labor leaders pointed to SK Hynix, which last year agreed to allocate 10% of annual operating profit to a performance bonus pool.

Samsung had proposed allocating 10% of operating profit to bonuses, along with a one-time special compensation package that exceeds industry standards. Company executives argued that the union’s demands would be difficult to sustain over the long term.

Under the new compensation system, Samsung will keep its existing profit-sharing bonuses and add a new scheme for the chip division funded by 10.5% of performance, according to a statement from the union. The bonus pool will be split between different levels of the organization, with 40% allocated to the division and 60% to individual business units.

Instead of cash, employees will receive the bonus in stock, after tax. They can sell a third of those shares immediately, while the rest of the shares will have to be held for up to two years.

In addition to the new bonuses, Samsung agreed to an average wage increase of 6.2% this year, along with improved child support payments and housing loans.

The agreement, however tentative, will likely come as a relief to customers and other business interests.

“There are mounting concerns that any significant production disruptions or operational uncertainty at Samsung Electronics could place additional strain on the global memory semiconductor market, potentially worsening supply bottlenecks, price volatility, procurement uncertainty and broader supply chain instability,” the American Chamber of Commerce in Korea said in a statement this month.

https://preview.redd.it/joi14srfae2h1.png?width=1574&format=png&auto=webp&s=22b9d419f02b753257ca0c8e83e39882d80c127f

https://preview.redd.it/u3uwtiqcbe2h1.png?width=1578&format=png&auto=webp&s=0ec23b1017124a110113b6693053ce43e1164e2a

Note:

• 50k workers is 40% of Samsung's South Korean workforce
• $DRAM holdings = 20% Samsung, 27% SK Hynix
• Few days later, Samsung was granted court injunction against imminent strike action

Discuss:

• Bullish or bearish for MU, SNDK, WDC, STX?
• Supply squeeze or demand slowdown for memory prices?
• Short-term shock or longer-term pricing catalyst?

--

Source 1: https://www.investing.com/news/stock-market-news/samsung-strike-looms-why-analysts-say-to-watch-mu-as-memory-fabs-warm-down-4692589

Samsung Electronics has entered emergency management mode as up to 50,000 employees prepare to strike for 18 days starting May 21, according to Mizuho TMT Sector Specialist Jordan Klein. The company has begun a "warm down" of its memory fabs at the Pyeongtaek facility to prevent equipment damage during a potential stoppage.

Samsung management and its union remain far apart on negotiations, with the union demanding a 15% share of operating profits and removal of bonus caps. The company’s stock dropped 8.6% on Friday.

--

Source 2: https://www.tomshardware.com/tech-industry/samsung-starts-winding-down-chip-producton-six-days-before-planned-18-day-strike

According to the Seoul Economic Daily, daily losses could approach 3 trillion won ($2 billion) if fabrication lines are paused entirely. Professor Kwon Seok-joon at Sungkyunkwan University previously estimated that the 18-day walkout alone would cause 10 trillion to 17 trillion won ($17 billion) in direct losses, while JPMorgan has projected total losses of up to 43 trillion won ($28 billion) when factoring in labor costs and extended production disruption.

https://preview.redd.it/0v7difz13p1h1.png?width=1594&format=png&auto=webp&s=2381d62cc48e775706cf6c61547c424944885a6a

https://preview.redd.it/os7g9o043p1h1.png?width=1583&format=png&auto=webp&s=5f7583831bb7eb16dbcec10e6392f8b2a588eaed

Source: https://www.poet-technologies.com/news/poet-technologies-and-lumilens-advance-wafer-level-photonic-integration-for-next-generation-ai-optical-networks

POET Technologies Inc. ("POET" or the "Company") (NASDAQ: POET), a leader in highly integrated optical engines and light sources for AI networks, and Lumilens Inc. ("Lumilens"), an emerging leader in high-performance scale-up and scale-out optical interconnects for AI workloads, today announced they have entered into a supply agreement that establishes a strategic joint development and commercial technology partnership to advance a new class of wafer-level photonic integration for frontier AI infrastructure.

Modern AI computing was made possible by successive leaps in wafer-level integration: first 2.5D electrical interposers that brought GPUs and HBM into a single package, then hybrid bonding that enabled today's HBM stacks and 3D logic. The optical layer, now the defining bottleneck for scaling AI, has not made that leap. At the center of the POET/Lumilens joint development program is a new paradigm for integration and module fabrication – the Electrical-Optical Interposer (EOI) – combining alignment-free wafer-level optical engine production with next-generation optical chipsets and advanced manufacturing capabilities, all to meet the ever-growing demands for scale and performance in AI infrastructure.

The supply agreement between Lumilens and POET establishes a commercial framework to support the joint development program, and, as part of that framework, Lumilens has placed an initial purchase order with POET for the manufacturing of EOI-based engines valued at $50 million. This purchase order represents the first phase of a broader supplier relationship that could scale to $500+ million in cumulative purchases from POET over five years.

In connection with the supply agreement, and to align both companies to the long-term value created through the partnership, POET has granted Lumilens a warrant to purchase up to 22,921,408 common shares. The warrant is immediately exercisable for 2,292,140 shares, with the remaining shares vesting and becoming exercisable in tranches based on cumulative payments by Lumilens toward future purchase orders totaling up to $500 million. The warrant is exercisable over nine years at an exercise price of $8.25 per share.

+11% after-hours because of earnings