Japanese memory chipmaker Kioxia Holdings has signaled record-high earnings on the back of an artificial intelligence (AI) chip boom, and shareholders are now calling for large bonuses to be paid to employees.
According to the Nihon Keizai Shimbun (Nikkei) on Sunday, a series of opinions at Kioxia's annual general meeting held on June 25 argued that the company should actively share its improved performance with employees.
One shareholder, a man in his 60s who attended the meeting, said, "If profits are not shared with employees, they may leave for other companies," adding, "Compensation gives meaning to work." Another shareholder in his 30s also argued, "At minimum, compensation at the same level as global competitors is needed."
Kioxia has emerged as one of the top companies by market capitalization on the Japanese stock market, driven by surging demand for AI memory chips. Market research firms QUICK and FactSet projected that Kioxia's operating profit for the fiscal year ending March 2027 would reach 7.39 trillion yen (about 70.5 trillion won), an eightfold increase from a year earlier.
Nikkei also analyzed the scale of compensation Kioxia employees could receive if Korean chipmakers' bonus systems were applied. SK hynix agreed last year through labor-management negotiations to pay 10% of operating profit as bonuses. Applying this directly to Kioxia, the calculation shows each employee could receive a bonus of about 50 million yen (about 470 million won), the newspaper reported.
However, analysts say the likelihood of such large-scale bonus payments is realistically low. Because Kioxia operates based on the compensation system from its days as part of Toshiba before becoming independent, the institutional burden of introducing unprecedented levels of bonuses is significant.
Nikkei noted that semiconductor companies in Korea and Taiwan are actively expanding performance-linked bonuses. SK hynix decided to pay 10% of operating profit as a bonus fund, while Samsung Electronics also agreed, after lengthy labor-management negotiations, to use 10.5% of business performance as a bonus fund.
Taiwan's TSMC, though it has no labor union, has paid about 12% of net profit as bonuses, and at this year's shareholders' meeting it stated that next year's bonuses would maintain a growth rate equal to or higher than that of the past three years.
In Japan, semiconductor equipment makers have actively moved to expand performance-linked bonuses. In Nikkei's "Winter Bonus Survey" last year, Disco ranked first with 4.49 million yen (about 42.69 million won). Tokyo Electron and others have also rewarded employees with similar levels of bonuses. But the gap compared with Korea and Taiwan is significant, observers point out.
Nikkei forecast that, with competition for global talent intensifying amid the AI chip boom, it will not be easy for Japanese companies to maintain their existing seniority-based compensation systems. One engineer who worked at an overseas chipmaker said, "Japanese companies have a strong culture of valuing balance across industries, making it difficult to introduce performance-based compensation systems," and pointed out, "If Kioxia's response is delayed, it could lead to an outflow of top talent."
