Following employee discontent over rumored bonus cuts, the CEO of Taiwan Semiconductor Manufacturing has pledged that this year's profit-sharing bonuses will see an average increase exceeding 30%, a higher rate than last year's. The move highlights the growing tension over profit distribution between tech giants and their workforce during the AI boom.
On Wednesday, citing a person familiar with the matter, Bloomberg reported that CEO C.C. Wei made the commitment during an internal employee meeting. The source requested anonymity due to the private nature of the event. TSMC confirmed the internal meeting was held and had previously stated it expects the full-year growth rate for the employee profit-sharing bonus in 2026 to surpass that of 2025.
This assurance comes after TSMC employees anonymously posted on online forums questioning the fairness of quarterly bonus increases, with some even discussing the possibility of forming a union or organizing a strike. Concurrently, a recently approved ten-year wage agreement at Samsung Electronics' union has provided a direct point of comparison, fueling the dissatisfaction among TSMC staff.
Record Profits Contrast with Rumors of Bonus Cuts TSMC reported a first-quarter 2025 net profit of NT$572.5 billion (approximately $18.2 billion), a 58% year-on-year increase, continuing to benefit from robust demand for advanced process technologies driven by global AI infrastructure investment. However, these strong financial results have not quelled internal pay disputes; instead, they stand in stark contrast to rumors of reduced bonuses.
According to DigiTimes, news that TSMC planned to cut performance bonuses by approximately 15% spread rapidly among employees. Staff had generally expected the company to allocate about 13% of retained earnings for bonuses, but this practice is reportedly being reconsidered. Based on 2025 performance, the average TSMC employee bonus was around NT$2.64 million (approximately $87,000), with the total bonus pool amounting to roughly NT$206.1 billion.
Analysts suggest the pressure on bonuses is most likely linked to TSMC's unprecedented scale of capital expenditure. The company's annual capital spending currently ranges from $52 billion to $56 billion, as it simultaneously constructs 12 new wafer fabs in the United States, Japan, and Germany to solidify its technological leadership in 2-nanometer and 1.4-nanometer process nodes. This massive expansion continuously consumes cash flow, directly limiting the funds available for employee compensation.
Samsung and SK Hynix Deals Set a Benchmark, Pressure Spreads to Taiwan A series of wage agreements from South Korean competitors has further intensified employee sentiment at TSMC. On May 27, the Samsung Electronics union approved a ten-year deal with 73.7% support. Approximately 78,000 employees in the semiconductor division will receive 10.5% of the company's annual operating profit as stock bonuses, plus an additional 1.5% in cash. Samsung had previously faced the threat of an 18-day work stoppage after its union rejected a one-time bonus proposal.
According to KB Securities estimates, if Samsung achieves an operating profit of KRW 327 trillion (approximately $217 billion) in 2026, the average bonus per employee in the memory chip division could reach around KRW 600 million (approximately $400,000). For SK Hynix, an agreement reached in September 2024 removed the previous cap limiting profit-sharing to "no more than 10 months of basic salary," replacing it with a system allocating 10% of annual operating profit to the bonus pool. Macquarie Securities estimates that if SK Hynix achieves KRW 447 trillion in operating profit by 2027, with 35,000 employees, the average bonus could reach approximately KRW 1.29 billion.
In comparison, TSMC's average per-employee bonus for 2025 was about $87,000, a significant gap compared to the potential levels for South Korean peers. This disparity has become a key catalyst for employee dissatisfaction.
Limited Avenues for Employee Advocacy in the Absence of a Union Since its founding in 1987, TSMC has never established a labor union, leaving employees without a formal collective bargaining mechanism—a stark contrast to Samsung and SK Hynix. This institutional void has forced the current wave of discontent to be expressed through informal channels.
Complaints have spread to workplace community platforms like Dcard and various TSMC-specific Facebook groups. Topics include the legal feasibility of forming a union and whether the company prioritizes shareholder returns and overseas expansion over the interests of its local workforce. Some employees chose to voice their concerns more prominently ahead of TSMC's annual shareholders' meeting on May 28, raising the possibility of the conflict becoming more public.
Commenting on the situation, Doris Hsu, Chairperson of silicon wafer manufacturer GlobalWafers, stated that the key determinant of a company's performance is not the presence of a union, but whether the company shares its profits with employees.
Historical Bonus Pool Growth and CEO Wei's Pledge Historically, the growth rate of TSMC's total employee profit-sharing bonus pool has largely kept pace with the company's net profit growth. For 2025, the company allocated approximately NT$103 billion for this program, a 46.6% increase from the previous year. TSMC's corporate charter commits to allocating no less than 1% of its annual profit to the employee incentive plan.
CEO Wei's pledged increase of over 30% is higher than last year's growth rate but remains below the company's net profit growth. TSMC's gross margin has risen to 66% this year, with first-quarter net profit more than doubling compared to the same period two years ago, as the sustained explosion in AI demand has significantly boosted the company's profitability.
Throughout his over-ten-year tenure leading TSMC, C.C. Wei has consistently emphasized stability and long-term thinking. His proactive address of the compensation dispute in the employee meeting indicates that even this global chipmaking leader is not immune to public pressure regarding the distribution of AI-driven profits.
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