Taiwan Semiconductor Manufacturing (TSM.US) CEO C.C. Wei informed employees on Wednesday that the average profit-sharing bonus this year will increase by more than 30%, addressing concerns some staff expressed online about the incentive program. As a critical pillar of global AI infrastructure, TSMC is expanding its employee incentive plans amid soaring profits.
According to informed sources, during an internal company-wide meeting on Wednesday, Wei stated he was confident that the per-employee profit-sharing bonus in Taiwan would grow by over 30% year-over-year, surpassing last year's increase. Wei's remarks highlight the growing pressure on major beneficiaries of the historic AI development and spending boom to share more of their rapidly growing revenue with employees.
This week, the main union at Samsung Electronics reached an agreement where the world's largest memory chipmaker will distribute approximately $27 billion in bonuses to employees, following threats from union leaders to organize a strike. TSMC's CEO made his commitment after several days of online discussions raised questions about the size of bonus increases, with some anonymous posts expressing doubts.
TSMC confirmed that the internal employee meeting took place but declined to comment further. In a statement earlier this week, the company expressed strong confidence that the full-year growth rate of performance-based employee profit-sharing would exceed last year's level.
Wei, who has held leadership roles at TSMC for over a decade, has consistently emphasized stability and long-term thinking in company strategy. During the pandemic, he repeatedly stated that TSMC's pricing would be strategic rather than opportunistic—a policy that has proven effective, enabling the company to raise its gross margin to an enviable 66% this year.
TSMC's first-quarter earnings report released in April showed revenue of NT$1.134 trillion (approximately $35.9 billion), a 35% year-over-year increase, nearly doubling the growth rate from the same period last year. Net profit reached NT$572.5 billion, up 58% year-over-year, more than double the figure from two years prior (approximately NT$280-290 billion).
The earnings report was impressive, with net profit, gross margin, and operating margin all significantly exceeding analyst forecasts, demonstrating substantially strengthened profitability. The gross margin achieved a historic breakthrough, rising to 66.2%, expanding nearly 4 percentage points from the previous quarter's 62.3% and well above the market estimate of 64.5%.
The total size of TSMC's employee profit-sharing pool grew roughly in line with net profit last year. The company allocated approximately NT$103 billion for the plan in 2025, a 46.6% increase year-over-year. According to its corporate charter, TSMC commits to allocating at least 1% of its annual profits to incentive programs.
TSMC's employee meeting coincided with the resolution of a months-long standoff between Korean chip giant Samsung and its largest union. Unlike the highest-valued company in Korea, TSMC does not have a union, but its employees had recently begun voicing dissatisfaction publicly on online forums.
Just the day before (May 26), with personal mediation by South Korea's Minister of Employment and Labor Kim Young-hoon, Samsung Electronics and its union dramatically reached a provisional wage agreement on the eve of a strike, successfully averting a full-scale 18-day strike originally scheduled to begin on May 21.
The dispute stemmed from Samsung's epic profit surge amid the AI boom: first-quarter 2026 operating profit reached 57.2 trillion won, a 756.1% year-over-year increase. The union initially demanded 15% of the semiconductor division's operating profit as an annual guaranteed bonus, leading to a negotiation impasse.
The final agreement states that employees in the semiconductor (DS) division will receive 10.5% of the annual operating profit as a "special operating performance bonus" in stock form, plus an additional 1.5% cash incentive, valid for ten years with no cap on distribution. Based on this calculation, per-employee bonuses in the memory chip division could reach approximately 600 million won, equivalent to about $400,000 (approximately 2.7 million yuan).
For comparison, just over a month ago, the Samsung union threatened a full-scale strike involving about 57,000 members if management did not meet its demands. A previous one-day strike in April had caused Samsung's factory capacity to plummet by 58%.
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