SK Hynix

SK hynix Inc. () is a South Korean memory semiconductor supplier of dynamic random-access memory (DRAM) chips and flash memory chips. Hynix is the world's second-largest memory chipmaker (after Samsung Electronics) and the world's 3rd-largest semiconductor company. Founded as Hyundai Electronic Industrial Co., Ltd. in 1983 and known as Hyundai Electronics, the company has manufacturing sites in Korea, the United States, China and Taiwan. In 2012, when SK Telecom became its major shareholder, Hynix merged to SK Group (the third largest conglomerate in South Korea).
The company's major customers include Apple, Asus, Dell, HP Inc., and Hewlett Packard Enterprise (formerly Hewlett-Packard). Other products that use Hynix memory include DVD players, cellular phones, set-top boxes, personal digital assistants, networking equipment, and hard disk drives.
Criticism and controversies.
Illegal Pay-cut.
According to SK Hynix's "Annual Salary Rules," the employment rules for office workers, employees are to be paid from 90% to 110% of the contract wage depending on their annual evaluation. However, the so-called 'Self-Design' system was introduced in 2018, allowing managers to arbitrarily adjust each employee's salary. Under this system, differences in wages between departments and individuals occur even if they receive the same evaluation. It is a zero-sum where the head of the organization distributes a limited budget to his employees. This adjustment of wages shall be made by the subjective judgment of the head of the organization without any objective grounds or criteria. Under the newly introduced wage system, only 60 percent of the annual salary is guaranteed. It has been reported that a majority of employees in a specific department received less than 90% of the contract salary.
Such a system is a clear violation of Labor Standards Act of Korea, which requires the consent of a majority of workers if the employment rules are changed against workers. In 2020, SK Hynix Labor Union submitted a petition to the Gyeonggi Provincial Labor Relations Commission and sent an official letter to the company. In response, the company held a briefing session on the "Self-Design" system and tried to ask the consent of employees. The briefing session and consent process has many procedural defects, which caused more controversy.
Deceptive Revision of Employment Rules.
When the above mentioned illegal pay-cut became controversial, SK Hynix decided to hold a briefing session to ask consent of the employees, but it caused another controversy.
Due to the various procedural defects mentioned above, such consent procedures are of course invalid.
Workers who have been disadvantaged by wage cuts due to illegal changes in the company's employment rules can later claim the amount of their lost wages to the company. In addition, according to the Supreme Court's ruling, even if the employment rules are changed later through due process, favorable contents in the previous labor contract shall prevail for workers who do not agree to change the employment rules.
2020 Incentive Bonus Controversy.
In January 2021, employees are complaining about the decision to pay a bonus of 20% of their annual salary. This is because performance-based bonuses were less than half of Samsung Electronics' peers. Samsung Electronics' sales and operating profit are far above SK Hynix's size, so there is no reason to pay the same performance-based bonus simply because of its increased operating profit, but the amount of performance-based bonus has not changed at all compared to 19 years. Sales and operating profit increased by 18.2% and 84.3% compared to 19 years, but the scale of performance-based bonuses has been set due to the management's unilateral notification.
This was the complete opposite of what the company emphasized the most at the job briefing session since 2018, when operating profit was significant, so there is a great backlash from low-year new employees. It attracted a large number of highly educated new employees under the bait of giving them the same or more than S company, but since that year, similar performance-based bonuses have never been paid to Samsung Electronics, and less than half have been paid in 2020, causing significant repercussions.
As complaints from employees continued, SK Chairman Choi Tae-won declared, "I will return all last year's salary." For your information, as of 2019, Chairman Choi's annual salary was around 3 billion won, and even if the number of SK Hynix employees was divided by 28,000, it was only 100,000 won per person, which made only oil pour.
Conflicts with employees are escalating further as the management believes that the payment was made based on a set standard, but does not present any of the criteria at all. There is no sympathy from employees because only the principle standard of paying excess profits of economic value-added (EVA) is being put forward, and even the proposed EVA is changing every announcement, and resistance continues.
Due to the nature of the semiconductor industry, which is actively moving to the same industry, attracting manpower is important, but due to the reform of various wage systems, there has been a controversy over performance-based pay.
Products.
Hynix produces a variety of semiconductor memories, including: