Samsung Reaches Agreement, TSMC Moves Quickly... Performance Bonus Conflict Sweeps Semiconductor Industry [Taiwan Chip Report]

Samsung-Driven Bonus Controversy Spreads to Non-Union TSMC
Chairman Addresses Rumors of 15% Bonus Cuts Directly
Pressure Mounts Over Profit Sharing Amid AI Semiconductor Boom

Global semiconductor companies enjoying an AI semiconductor supercycle (unprecedented boom) are now facing internal conflicts over performance-based compensation. After Samsung Electronics narrowly averted a strike by reaching a last-minute labor-management agreement, TSMC, the world's largest foundry (semiconductor contract manufacturing) company, also faced spreading rumors of performance bonus cuts, prompting the chairman to address the issue personally. As the AI boom has led semiconductor companies to achieve record-high sales, profits, and market capitalizations, disputes over the distribution of these gains are coming to the surface.

Taiwan TSMC. Yonhap News Agency

According to Taiwan Economic Daily News on May 29, TSMC Chairman and CEO C.C. Wei announced during a closed-door company town hall meeting held on May 27 (local time) that the size of employee profit-sharing bonuses would increase by more than 30% on average this year. CEO Wei canceled his previously scheduled overseas business trip to communicate directly with employees.

This measure comes in response to recent complaints raised by some TSMC employees on online communities and internal message boards regarding the scale of performance bonuses and the compensation system. At the meeting, CEO Wei assured employees, "The company's commitment to employee welfare and compensation remains unchanged," and added, "If this year's HR evaluations are at the same level as last year, annual performance bonuses will increase by more than 30%."

CEO Wei further stated, "The company is taking on a growing social responsibility within Taiwanese society," and announced plans to expand the proportion of investments aimed at social sustainability and giving back to Taiwanese society during the profit-sharing process. Nevertheless, he emphasized, "The total amount of performance bonuses itself will continue to increase," expressing strong confidence in the company's growth outlook.

Regarding salary policy, he drew a clear line by saying that there are currently no plans for a structural wage increase. He also said he was not particularly concerned about competitors' attempts to scout talent. In addition, he explained that performance bonuses are determined comprehensively based on the company's overall profitability and resource allocation, rather than the results of individual business units.

This internal atmosphere at TSMC is believed to have been influenced by the recent agreement at Samsung Electronics' union to pay up to 600 million won in performance bonuses per semiconductor manufacturing employee. While TSMC does not have an official labor union, employees have recently begun to publicly express their dissatisfaction with compensation through online platforms.

This controversy illustrates the semiconductor industry's dilemma over how to share surging corporate profits with employees amid the current AI semiconductor boom. Analysts note that, given TSMC's leading position over Intel, Samsung, and UMC in advanced semiconductor manufacturing is based on outstanding technology and employee dedication, ensuring fairness and proper distribution of performance rewards has now become a key management issue.

This year, TSMC achieved record results thanks to explosive AI chip demand. First-quarter net profit reached 572.5 billion New Taiwan dollars (approximately 2.738 trillion won), more than double the figure from the same period two years ago. According to TSMC's corporate charter, at least 1% of annual net profit must be allocated to the employee incentive pool. Last year, about 103 billion New Taiwan dollars were allocated to the employee profit-sharing program, a 46.6% increase from the previous year.

Taiwan Economic Daily News = Reporter Hyejung Yoon / Translated by The Asia Business Daily

※This column is published as part of a strategic partnership between The Asia Business Daily and Taiwan Economic Daily News.

This content was produced with the assistance of AI translation services.