SK Hynix closed at 1.646 million won on Aug. 25 after its production workers’ union narrowly rejected a proposed wage agreement that would have increased base pay by 6.3% and shifted much of the company’s profit-sharing bonus into stock.
The vote failed by only 25 ballots, with 7,535 members opposing the package and 7,510 backing it. Turnout reached 93.81%, and the final split was 50.08% against versus 49.92% in favor, according to the union’s ballot results. The outcome sends the memory-chip maker back toward renewed negotiations while its shares remain well below their June record.
The stock fell as much as 6.8% during the Aug. 25 session before recovering to finish down 1.5% from the previous close of 1.671 million won. The Kospi rose 0.2% on the day, leaving SK Hynix underperforming the wider South Korean market amid uncertainty over employee compensation and the company’s planned capital returns.
At 1.646 million won, SK Hynix was about 45% below its 2.987 million won peak reached on June 25. The intraday rebound suggested buyers emerged after the initial reaction to the union vote, but the session also showed how quickly the stock can move when corporate news collides with a volatile semiconductor market.
Wage deal divided union members
The rejected proposal paired the 6.3% salary increase with a revised profit-sharing structure: 60% of the bonus would be paid in SK Hynix shares and 40% in cash. The deal also would have doubled the housing-loan limit for married employees to 200 million won from 100 million won.
A pricing formula was included to reduce the risk that workers receive shares at an unfavorable valuation. Under the proposal, the stock-based portion would have been priced using the lowest closing price among three dates: the date of earnings guidance, the date the cash payment is made, and the date the shares are distributed.
That structure would give employees a measure of protection if the stock fell around the bonus-payment period, while also helping SK Hynix preserve cash compared with a fully cash-based payout. The close vote indicates that those terms did not fully overcome concerns among production workers about the balance between guaranteed pay, cash compensation and equity exposure.
A separate union representing technical and office employees approved the same package with roughly 60% support, according to the voting results. The agreements are applied separately, meaning SK Hynix can proceed with the accepted deal for that group while continuing discussions with the production workers’ union.
The split creates an added management challenge for a company whose workforce is central to the production of high-bandwidth memory and other advanced chips used in artificial-intelligence systems. A prolonged dispute would focus attention on labor costs and compensation at a time when demand for memory capacity has strengthened sharply.
Buyback offers support but does not settle compensation issue
SK Hynix announced a 40 trillion won share-buyback plan on Aug. 19. The program adds a major corporate buyer to the market and could reduce the number of shares outstanding if purchases are retired, though the company’s execution schedule and treatment of repurchased shares will determine its direct effect on share count.
The labor dispute intersects with that plan because employee stock bonuses can increase the number of shares used for compensation, while a cash-heavy bonus structure would increase the company’s immediate cash costs. Renewed talks could therefore affect the mix between cash outflows, stock awards and buyback activity, even if the wage negotiations do not alter the headline size of the repurchase authorization.
The Aug. 25 trading range showed the near-term levels being watched by the market. Shares fell to 1.557 million won before recovering toward 1.687 million won, then closed at 1.646 million won. Based on the stock’s 52-week range of 253,000 won to 2.987 million won, the close sat just above the roughly 1.620 million won midpoint retracement level.
The next lower reference level from that range is near 1.297 million won, equivalent to a 61.8% retracement from the peak, while the 38.2% level is around 1.943 million won. Those figures are technical reference points rather than forecasts, but they frame the distance SK Hynix must recover before revisiting the upper part of its recent trading range.
Earnings strength contrasts with sharp share-price retreat
SK Hynix’s recent financial performance has remained strong. The company reported quarterly revenue growth of 40.82% from a year earlier and 47.19% from the preceding quarter. Net profit rose 108.11% year on year and 126.97% quarter on quarter, while earnings per share increased 103.85% from a year earlier.
Operating margin was near 76% in the latest quarter, while trading data placed EBITDA at about 143.58 trillion won and the EBITDA margin at 62.89%. Such figures reflect the powerful earnings leverage memory producers can achieve during a favorable pricing cycle, particularly when demand for AI-related memory products is high.
Yet the stock’s retreat from June’s record illustrates that strong reported earnings have not eliminated concerns over valuation, semiconductor-cycle risk and the pace at which AI infrastructure spending can be sustained. SK Hynix also has a beta of about 1.77 and recorded volatility near 3.31%, according to market data, characteristics consistent with wide daily moves. Its intraday swing on Aug. 25 exceeded 8%.
Analyst coverage compiled in market data showed about 38 to 39 recommendations, all in buy categories, with an average 12-month target near 3.16 million won. The target range was unusually broad, from 1.2 million won to 5.3 million won, underscoring the uncertainty around memory pricing, AI demand and the durability of current margins.
SK Hynix is expected to report its next earnings on Oct. 27. Before then, the stock is likely to react closely to any timetable for the buyback, progress in wage talks and semiconductor-sector moves linked to major AI-chip earnings.
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