Taiwan Semiconductor Manufacturing Co. (TSMC) Chairman C.C. Wei canceled a planned overseas business trip and held an emergency internal briefing to soothe employees amid rumors of bonus cuts at the world's largest foundry. The move comes as Samsung Electronics' (005930.KS) labor union recently came close to striking over a similar bonus dispute, drawing industry-wide attention.
According to Bloomberg, Taiwan's Central News Agency, and the Liberty Times on Tuesday (local time), Wei told employees at the briefing that "this year's employee bonuses will increase by an average of more than 30 percent compared with the previous year."
Wei stepped in directly to quell internal discontent after rumors spread on Taiwanese online communities and anonymous message boards, including claims that "earnings are at record highs but bonuses are being cut" and that bonuses could be slashed by up to 15 percent.
"Our consideration for employees remains unchanged," Wei said, stressing that "the annual growth rate of bonuses has not fallen below 30 percent since 2023." He added, "If an employee's performance evaluation is the same as last year, this year's bonus increase will exceed last year's level." Wei also said the company would raise wages for lower-ranking employees by a greater margin than for senior managers.
AI Chip Super Boom: Compensation Demands Grow Despite Record Earnings
TSMC has emerged as the biggest beneficiary of the rapidly growing artificial intelligence (AI) chip market. With global tech giants including Nvidia outsourcing most of their advanced AI chip production to TSMC, the company's earnings have surged.
TSMC's first-quarter net profit reached 572.5 billion New Taiwan dollars (about 27.254 trillion won), more than double the figure from the same period two years earlier. Gross profit margin also climbed to around 66 percent. The company allocated about 103 billion New Taiwan dollars (about 5 trillion won) to its employee profit-sharing program last year, a 46.6 percent increase from the previous year. TSMC's articles of incorporation require it to distribute at least 1 percent of annual net profit as employee incentives.
However, internal complaints have reportedly persisted that "employee compensation is not keeping pace with the rate of profit growth." Some employees commented on anonymous platforms that "corporate profits have nearly doubled but wage increases are only around 30 percent," while others argued that "a labor union needs to be established" or asked, "Shouldn't we even go on strike?"
In response, Wei said, "We will not adopt a system of differentiated bonus payments based on profits by business division," and urged employees to "use your bonuses to buy company shares if you believe in the company's future." Regarding the possibility of future adjustments to the compensation structure, he explained, "This is not about reducing employee contributions but about maintaining global competitiveness over the next 10 to 20 years."
"Not Communication, but a One-Way Announcement": Discontent Continues After Briefing
Despite the CEO's direct intervention, the internal mood has not fully settled. According to the Liberty Times, criticism of the company on anonymous boards reportedly increased after the briefing.
Some employees responded that "mutual trust is being shaken" and that "it was not a communication meeting but a one-way announcement." Complaints also surfaced that the briefing was "like ticketing for a concert," as attendance was limited to those who registered in advance, the notice was issued only after work hours the previous day, and no separate online broadcast was provided.
The industry views the likelihood of an actual strike as low, given that TSMC has an employee welfare committee but no formal labor union. Still, analysts say employee expectations regarding profit-sharing and compensation levels are rising across the global semiconductor industry following the Samsung Electronics case.
Meanwhile, TSMC is scheduled to pay bonuses to employees on the 29th, when individual employees will be able to check their personal payout amounts.
