Recently, despite significant increases in revenue and profit, the leading integrated circuit foundry Taiwan Semiconductor Manufacturing (TSM) faced internal discontent over reports of a potential 15% cut in employee bonuses.
On May 27, according to Taiwanese media reports, TSM's Chairman and CEO, C.C. Wei, personally addressed employees in a communication session. He emphasized that the company's care for its staff remains unchanged. He stated that if this year's performance assessments are consistent with last year's, he is confident that the total annual bonus will still increase by over 30%.
It is understood that in the meeting, Wei explained the company's profit distribution strategy, focusing on three key stakeholders: employees, shareholders, and society. Employees value job worth, compensation, benefits, and development opportunities; shareholders expect steady corporate growth and reasonable returns; and the company bears responsibility for the social environment and the conservation of public resources. Therefore, TSM reviews its profit distribution annually to balance these three needs and implement its strategy for sustainable business operations.
Wei stressed that the commitment to employee welfare will not change. With business expansion and profit growth in recent years, he thanked employees for their contributions. From 2023 to the present, TSM's employee bonus pool has grown by no less than 30% annually, and in some cases, even more than 30%.
Wei indicated that if employee performance evaluations this year match last year's, he is confident that the total annual bonus for staff will still see robust growth, exceeding last year's 30% increase. Furthermore, TSM aims for salary growth for junior employees to outpace that of managers.
According to TSM's 2024 Sustainability Report, its global workforce in 2024 exceeded 84,500 people, with overall compensation maintained within the top 25% of the industry. From 2020 to 2024, the total annual expenditure on employee salaries and benefits increased from approximately NT$140.8 billion (about RMB 30.4 billion) to about NT$301.8 billion (about RMB 65.2 billion). In 2024, the total approved cash bonuses and rewards for TSM's Taiwan facilities exceeded NT$140.5 billion. The incentive programs at Taiwan facilities are implemented over two years: "Employee Cash Bonus" is distributed quarterly within the current year, while "Employee Cash Reward" is paid in the following year, encouraging long-term service and continuous contribution.
Previously, due to a sharp rise in memory chip prices leading to a significant profit increase for South Korea's Samsung, semiconductor employees at Samsung Electronics expressed dissatisfaction with the bonus distribution plan, threatening to strike. After multiple rounds of negotiations between Samsung's labor and management, a tentative agreement was reached, averting the strike threat.
On May 27, the tentative wage agreement reached between Samsung Electronics' labor and management passed a union vote, allowing the company to avoid production disruptions from a full-scale strike. Employees in Samsung Electronics' semiconductor business, specifically the Device Solutions (DS) division, are expected to receive performance bonuses this year potentially reaching up to approximately 600 million won (about RMB 2.723 million).
The explosion in artificial intelligence demand has also driven TSM's strong performance growth. TSM's Q1 2026 results comprehensively exceeded market expectations. In the first quarter, net profit reached NT$572.5 billion (about RMB 123.6 billion), a year-on-year increase of 58%; revenue was NT$11.34 trillion (about RMB 244.8 billion), up 35% year-on-year; and operating profit was NT$659 billion (about RMB 142.3 billion). All three metrics surpassed external estimates. A standout highlight for TSM this quarter was its gross profit margin reaching a new high of 66.2%, expanding nearly 4 percentage points from the previous quarter's 62.3% and significantly exceeding the market estimate of 64.5%.
TSM expects its total revenue growth this year to exceed 30%, higher than its previous forecast of below 30% and above the market consensus expectation of 25%-28%.
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