TSMC Chairman Directly Addresses Staff on Bonuses, Contrasting Samsung's Approach

South Korean tech giant Samsung Electronics and Taiwan's TSMC, the world's largest contract chip manufacturer, are navigating employee demands for performance bonuses as the semiconductor industry experiences a boom driven by massive AI investments.

While Samsung Electronics recently reached a labor agreement just before a planned strike, TSMC's chairman, C.C. Wei, took a proactive approach. He canceled an overseas trip to hold a private town hall meeting with employees to quell rumors that bonuses could be cut by up to 15% due to new overseas factory construction costs. TSMC's articles of incorporation stipulate that at least 1% of annual profits must be distributed as employee bonuses, with the board determining the final amount. In February, the board approved bonuses totaling approximately $6.5 billion, representing 10.6% of the company's annual operating profit.

During the meeting, Wei assured employees that their bonuses would increase by over 30% compared to the previous year. Unlike Samsung, TSMC does not have a labor union, but the company moved swiftly to address potential discontent. Wei also stated that bonus distribution would not be segmented by business unit profitability, a stark contrast to Samsung Electronics. Samsung's management, led by Vice Chairman Jeon Young-hyun, only recently engaged with the union six days before a planned strike, significantly reducing bonuses for employees in its currently loss-making semiconductor divisions, including foundry and system LSI, compared to the memory division.

Furthermore, Wei suggested a review of profit distribution methods to consider employees, shareholders, and social responsibilities as TSMC enters a new phase of development. This proactive stance by TSMC's leadership in addressing the distribution of profits from the semiconductor super-cycle sets it apart from domestic companies like Samsung and SK Hynix. The differing strategies underscore how global semiconductor leaders are managing employee expectations and compensation during a period of unprecedented profitability.

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This year's bonuses will increase by more than 30% compared to the previous year.