[비즈한국] The conflict between the DS (Device Solutions) and DX (Device eXperience) divisions within Samsung Electronics' labor unions is escalating into a formal organizational split. The Samsung Group's largest labor union, the Samsung Electronics branch of the Mega-Union (hereinafter "Mega-Union"), is pushing for a revision of its bylaws to restrict membership eligibility exclusively to employees in the DS division, which handles the semiconductor business.
The gap in performance-based bonuses between DS and DX, which surfaced during this year's wage and collective agreement negotiations, appears to be fueling not only inter-union rivalry but also clashes of interest within the Mega-Union itself. Furthermore, the situation has been compounded by revelations that rally supplies were purchased from a company represented by the father-in-law of Mega-Union Chairman Choi Seung-ho, alongside a vote of no confidence against members of the DX-affiliated leadership, bringing internal union strife to the surface.
Mega-Union to Retain Only DS
According to industry sources, the Mega-Union will hold a general assembly via mobile electronic voting from the 16th to the 22nd to vote on the proposed bylaw amendment that would limit membership to employees in the DS division. If the amendment passes, DX division members currently enrolled in the Mega-Union are expected to be removed.
The same assembly will also address motions of no confidence against Mega-Union Vice Chairman Lee Song-yi and Gwangju Branch Head Lee Won-il. Both are members of the DX division. A no-confidence motion requires approval from at least two-thirds of the registered members to pass.
The underlying reason for the Mega-Union’s attempt to reshape itself into a DS-exclusive organization lies in the widening compensation gap between the two divisions during this year’s wage negotiations. Following the wage agreement signed in May, a new special performance bonus was introduced for the DS division, funded by 10.5% of its operating profit, provided certain performance criteria are met. In contrast, it was decided that the DX division would receive company stock equivalent to 6 million won per person as part of mutual growth efforts.
As the structure linking compensation to division-specific performance has strengthened, differences in how the union should represent these interests have widened. Arguments that compensation based on DS performance should be increased separately have clashed with demands for creating a company-wide common fund to narrow the gap between business units. While the Donghaeng Union (a separate labor group) centered on the DX division has demanded a unified distribution of bonuses using company-wide resources, the Mega-Union argues that it is difficult to bundle these together uniformly given the different performance and compensation systems of each business unit.
Samsung Electronics Vice Chairman and DX Division Head Han Jong-hee (Note: Text says "Representative Director and DX Division Head," typically referring to Han or Roh Tae-moon) also recently communicated with employees during a management briefing, reportedly reaffirming the existing principle that performance bonus funds for DS and DX are operated separately. This move by the Mega-Union is interpreted as an attempt to separate these conflicting interests at an organizational level as the performance and compensation gaps between business units grow.
Internal Leadership Conflict Surfaces Ahead of Organizational Split
Amid the ongoing reorganization, controversy has erupted over the discovery that a contract for rally supplies, such as vests (valued at 370 million won), was signed with a company operated by Chairman Choi Seung-ho’s father-in-law.
On the 9th, the Mega-Union released a statement clarifying, "No financial benefits, such as rebates, commissions, or refunds, were attributed to the Chairman personally due to the purchase contract. Rather, it was a decision made to reduce union fee expenditures by proceeding with a contract at a lower price compared to other quotes, while also meeting the urgent delivery schedule for the vests." They further claimed, "We understand that a former secretary-general, who was removed from an appointed position due to conflicts with the vice chairman, took relevant materials, leaked them externally, and turned them into an issue."
Within the Mega-Union, issues of trust within the leadership have surfaced alongside the conflict of interest between DS and DX regarding the reorganization. Chairman Choi's side believes that Vice Chairman Lee Song-yi and Gwangju Branch Head Lee Won-il leaked information regarding the contract. Tensions escalated as Choi’s side claimed to have confirmed KakaoTalk messages in which the two discussed ways to oust the chairman.
The Donghaeng Union side denied the allegations, stating, "We have not received any information regarding that matter in advance," and drawing a line by saying, "The claim (by the Mega-Union) that the 'Donghaeng Union is making this an issue centered around the election period' is not true."
The key moving forward is the bargaining strategy of each union following the reorganization. The Mega-Union is already considering not engaging in joint bargaining with other unions for the 2027 wage and collective agreement. On the 6th of next month, it plans to decide via member vote whether to include the introduction of a company-wide common bonus fund and improvements to the deficit penalty for System LSI and Foundry in next year's bargaining demands.
If the Mega-Union reorganizes into a DS-centered group, it will be able to concentrate its bargaining power on improving performance and working conditions within the semiconductor division. Conversely, DX members will find themselves in a position where they must secure demands like additional compensation through other unions. In fact, the Donghaeng Union has already signaled plans for off-site protests, demanding additional compensation for DX employees even after this year's wage negotiations concluded. The National Samsung Electronics Union (NSEU), the third major union at Samsung Electronics, appears to be keeping its distance from the internal conflicts unfolding within the Mega-Union.
If the Mega-Union's bylaw amendment is passed, changes to the existing structure that held DS and DX together in a single organization are inevitable. With the 2027 wage and collective bargaining cycle approaching, the possibility is growing that the landscape of Samsung Electronics’ labor unions will be redrawn based on the interests of each business unit.