Investors3
3週前
Samsung Electronics shares surge 8% after strike averted with $416,000 bonuses Interesting?
The resolution highlights the fragility of global semiconductor supply chains and sets a precedent for labor negotiations in the tech sector.
by Editorial Team
15 hours ago
Samsung Electronics just bought itself labor peace, and the market loved it. Shares surged 6-8% on the Korea Exchange after the company reached a deal with its union to avert an 18-day strike that would have involved roughly 48,000 workers.
The centerpiece of the agreement: a performance-linked bonus scheme that could pay individual chip division employees around $416,000. That’s not a typo. It’s also not quite as straightforward as it sounds.
The deal behind the rally
Here’s how the math works. Samsung agreed to allocate approximately 10.5% of its chip division’s operating profit to performance-linked bonuses. The payouts will be distributed primarily in stock, spread over a decade. An employee earning a base salary of about 80 million Korean won could theoretically see a bonus of roughly 626 million won, or approximately $416,000, this year. But only if the division hits specific operating profit targets.
In English: workers get a potentially life-changing payout, but it’s tied to the chip business actually performing at ambitious levels. And they’ll receive most of it in Samsung stock over ten years, not a lump-sum check.
The agreement still needs to pass a union vote scheduled for May 22-27. Given the size of those potential bonuses, though, the outcome seems fairly predictable. When someone offers you a six-figure bonus for not striking, the calculus tends to resolve itself quickly.
The stock’s reaction outpaced the broader KOSPI index, which also rose on the same day. Investors clearly interpreted the deal as removing a significant near-term risk from Samsung’s outlook.
Why the strike threat mattered so much
Samsung isn’t just South Korea’s largest company. It’s one of the world’s most important semiconductor manufacturers, and its chip division sits at the intersection of multiple booming markets, particularly artificial intelligence.
An 18-day walkout involving 48,000 workers would have been devastating. Not just for Samsung’s production schedules, but for global supply chains that depend on the company’s memory chips and advanced packaging capabilities. When Samsung’s factories stop, customers from Apple to NVIDIA feel it downstream.
The timing of the strike threat made it especially sensitive. The AI infrastructure buildout is driving unprecedented demand for high-bandwidth memory and advanced chips. Samsung has been racing to catch up with rival SK Hynix in the HBM (high-bandwidth memory) segment, which has become the hottest product category in semiconductors. Any production disruption right now would have handed competitors an opening that might take quarters to close.
Labor relations at Samsung have historically been complicated. The company’s workforce has grown more assertive in recent years, with union membership expanding and workers pushing for a larger share of the profits generated during semiconductor upcycles. This deal represents a significant concession from management, essentially promising workers a direct stake in the chip division’s financial performance.
The fine print investors should read
Look, an 8% single-day pop is a strong signal that the market views this resolution favorably. But the bonus structure creates some dynamics worth thinking through.
The 10.5% profit-sharing allocation is substantial. In a year where the chip division posts strong operating profit, that’s a meaningful chunk of earnings being redirected to employee compensation. Shareholders are essentially sharing their upside with labor in a more formalized way than before.
The stock-based component is a double-edged sword. On one hand, it aligns worker incentives with shareholder interests, the kind of thing management consultants love to put on slides. On the other hand, it creates a steady stream of new equity distribution over a decade. Depending on how the shares are sourced, whether from treasury stock, new issuance, or market purchases, the dilution or cost dynamics could vary significantly.
Then there’s the question of what happens when the cycle turns. Semiconductor profits are notoriously volatile. The bonuses are tied to operating profit targets, which means they should naturally shrink during downturns. But workers who’ve gotten accustomed to six-figure payouts during boom years tend to be, let’s say, less enthusiastic about austerity during bust years. Samsung may have bought labor peace for this cycle but potentially set expectations that become harder to manage in the next one.
Some analysts have flagged these equity-based incentives as a potential concern in a volatile industry. The optimistic case is that if Samsung successfully captures AI-related semiconductor demand, shares could potentially reach 500,000 won, a level that would validate both the bonus scheme and the current rally. The pessimistic case is that Samsung is making promises indexed to a best-case scenario that may or may not materialize.
For investors watching the semiconductor space, the key variable hasn’t changed: Samsung’s ability to execute on HBM and advanced chip production. The strike risk is now off the table, pending the union vote. What remains is the fundamental question of whether Samsung can close the technology gap with SK Hynix and secure its share of the AI infrastructure buildout. A generous bonus plan doesn’t change that competitive picture. It just ensures the workers building those chips will be highly motivated to try.
https://cryptobriefing.com/samsung-shares-surge-strike-averted-bonuses-2/
mick
7年前
reading, Why, And How To Invest In Samsung (SSNLF)
CONTRIBUTOR
Prableen Bajpai
PUBLISHED
APR 22, 2016 10:21AM EDT
Samsung Electronics Co., Ltd. (SSNLF), the South Korean conglomerate, has managed to capture a good share of the global markets with its products and is often referred to Apple’s archrival. The company ranks seventh on the list of the world’s most valuable brands thanks its success in the electronics business and word of technology.
While Samsung is a hugely popular brand, holding its shares has never been easy for U.S. investors. We take a look at the latest developments at Samsung as well as understand the best ways to invest in it.
Flexible Smartphones
Samsung’s foldable smartphone – which has been in news for a while - should be reality soon. The hybrid product, dubbed as “smartlet,” will be a 5-inch smartphone that unfolds to turn into a 7-inch tablet. According to Korea’s news site ETNews, Samsung is targeting a 2017 release of the smartlet. Samsung’s patent application publication shows not just the foldable smartphone, but also a scrollable and bendable smartphone designs. However, there is no news on the release or production of the other smartphone options as of now.
The smartphone market is flooded with regular smartphones and may be over-saturated. Because of this, there is the potential that a new-concept product like smartlet can create momentum.
Artificial Intelligence
Samsung understands that Artificial Intelligence (AI) is going to be mainstream soon, and has looked to invest in AI companies, such as Vicarious Systems, Reactor Labs, Maluuba, Idibon, Automated Insights, Winston and Expect Labs (recently renamed MindMeld).
According to a report by CB Insights, Samsung Venture Investment ranked fourth in size among global firms, which have made investments in AI start-ups in the last five years (2010-2015).
“Artificial intelligence will make things we do on smartphones much more convenient. Your well-trained phone will bring about a huge customer loyalty” said Rhee In Jong, EVP, Head of R&D, Software and Services at Samsung Electronics Mobile Business Division.
Virtual Reality
Virtual Reality (VR) is another buzzword in the tech world. Samsung’s Gear VR is already available and is powered by Oculus, and works seamlessly with its smartphones (Galaxy S7|S7 edge, Note5, S6 and S6 edge).
According to a report by IDC, the shipment of Virtual Reality (VR) hardware will witness a surge in 2016 primarily led by products from Sony, Samsung, HTC and Oculus, with total volumes touching 9.6 million, generating a revenue of approximately $2.3 billion. It further predicts that the growth of VR hardware is likely to reach 64.8 million by 2020, recording a 183.8% growth (CAGR, 2016-2020) while the volume of augmented reality hardware should increase from the present 0.4 million to 45.6 million by 2020 growing at 189.8% (CAGR, 2016-2020). Samsung believes that “VR will become the future of how we engage with media.”
Samsung Pay
To accelerate the adoption of its mobile payment service, Samsung Pay has teamed up with Verifone (PAY). The partnership will help encourage further adoption by merchants and consumers. Samsung Pay, which is currently available in the U.S., South Korea and China, is likely to be rolled out in Singapore during the second quarter 2016.
Ways to Invest
The shares of Samsung don’t trade on major exchanges like Nasdaq and NYSE in the U.S. It is listed on the Korean exchange and available as GDR in London and Luxembourg. However, in accordance with Rule 144A of the U.S. Securities Exchange Act, U.S. citizens are prohibited from investing in GDR’s. The following options are available to U.S. investors:
Investors can either buy shares directly in the Korean stock market after proper paper work or through a local securities firm or bank (Merrill Lynch, Pierce, Fenner & Smith Inc. are eligible)
Investors can buy Samsung’s shares traded over-the-counter in the U.S.
Investors can opt to take exposure to Samsung along with other Korean companies by investing in a South Korea ETF, for example, the iShares MSCI South Korea Capped ETF (EWY) has a heavy exposure of 20.64% towards Samsung Electronics Co., Ltd.
Final Word
While Samsung’s products are endorsed in the U.S., the same enthusiasm isn’t seen around its shares which suffer from a thin trading volume and consequently face illiquidity while trading OTC. This issue aside, Samsung continues to innovate and invest to keep pace with the latest developments and biggest technology giants around the globe.
The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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SSNLF
FuninUSA
8年前
Samsung Electronics made a significant commitment to renewable energy
Samsung Electronics is fulfilling its duty as a corporate citizen by expanding and supporting the use of renewable energy.
Recently, on its website,Samsung said it was planning to use 100 percent renewable energy at its factories, office buildings and operational facilities in Europe, China and the US by 2020, reported in FuninUSA news.
“As demonstrated by our expanded commitment, we are focused on protecting our planet and are doing our part as a global environmental steward,” said Won Kyong Kim, Samsung Electronics' executive vice president and head of global public affairs. Samsung Electronics' move was also welcomed by environmental organizations, FuninUSA reported.
Samsung said it would work with its top 100 partner companies to assist them in setting their own renewable energy targets, in partnership with the CDP's (formerly the Carbon Disclosure Project) supply chain program. Samsung said it intended to join the program next year.
FuninUSA
8年前
Samsung’s cash reserves in Q1 of 2018: reaching $30.1 billion, 17.2% year-on-year growth
Market research firm Chaebul.com recently released a group of data, showing that Samsung electronics co., hyundai motor co., and other major south Korean listed companies all had their cash reserves grow in the first quarter of 2018, reported in FuninUSA, a website which continuously provides product-reviews and global news.
According to the data, by the end of Q1, the total cash reserves of 47 listed companies, including samsung and hyundai, were 158.9 trillion won (about $148.1 billion), up 7.8 percent from a year earlier.
Reported in FuninUSA, by the end of March, Samsung’s cash reserves stood at 32.3 trillion won (about $30.1 billion), up 17.2 percent from a year earlier.
Among the top 10 listed companies in South Korea, the cash reserves of Shinhan Financial Group Company Limited and Korea Hyundai Heavy Industries Group increased by 11.9% and 9.4% respectively over the same period.
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