Unionized manufacturing workers at SK Hynix have voted against a proposed wage agreement, arguing that employees should be entitled to a greater percentage increase given the company’s bolstered financial performance this year.

Citing unnamed sources, The KoreaTimes reported that approximately 70 percent of the 204 representatives that make up the SK Hynix manufacturing workers' union rejected the deal that would have seen employees receive a 5.7 percent pay rise, in addition to increased medical payments.

Instead, the union, which represents workers at the company’s Icheon and Cheongju plants in South Korea, had originally demanded an eight percent increase in the basic salary.

The report stated that SK Hynix has said it will enter into further negotiations once unionized office workers at the company have voted on the same proposal.

In July the company posted its highest quarterly profits since 2018, recording a $3.96bn operating profit in Q2 2024.

SK Hynix is not the only chip company in South Korea currently involved in pay negotiations.

Workers at Samsung Electronics’ facilities in the country have enacted strike action over recent months, demanding a wage increase, in addition to improvements to the company’s performance-based bonus system.

Workers at the company’s offices in Seoul and chip production facility in Hwaseong staged an initial walkout on June 7 after Samsung awarded its workers a pay increase of 5.1 percent, below the average wage increase of 6.5 percent.

In April of this year, Samsung reported a 933 percent increase in its operating profit, driven by a resurgence in demand for its memory chips to support AI workloads.

After negotiations broke down, a second three-day walkout then took place on July 8-11, but after Samsung’s management reportedly failed to engage with the National Samsung Electronics Union (NSEU), the union announced the strike would be extended indefinitely.

Workers ultimately returned to work in early August, with the last reported strike action taking place over a four-day period from August 15.

Separately this week, it was reported that workers Samsung Electronics workers at a plant near the city of Chennai in southern India are also taking part in strike action to demand higher wages and better hours.