Taiwan Semiconductor Manufacturing (TSM) is facing internal unrest over compensation: while its quarterly net profit hit a record high, rumors of a potential 15% cut in employee bonuses have sparked widespread dissatisfaction. Some staff are openly discussing forming a union or even initiating a strike, signaling a spread of labor-management tensions from South Korea to Taiwan's semiconductor industry.
According to reports, news of TSMC's plan to reduce performance bonuses by approximately 15% has circulated rapidly among employees, creating a stark contrast with the company's strong financial performance. TSMC reported a first-quarter 2025 net profit of NT$572.5 billion (about $17.9 billion), a 58% year-over-year increase, driven primarily by surging demand for AI chips. In response, TSMC stated that it expects the growth rate of employee profit-sharing bonuses in 2026 to be higher than in 2025 and emphasized its "full awareness of its growing corporate social responsibility in Taiwan." However, the company did not directly address the rumors of cuts.
Compensation agreements at South Korean peers have further fueled discontent among TSMC employees. On May 27, Samsung Electronics' union approved a ten-year wage plan 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. SK Hynix has reached a similar arrangement, allocating 10% of its annual operating profit to an employee bonus pool. Based on the latest earnings forecasts from securities firms, employees in the chip divisions of both companies are expected to receive average bonuses in the range of several million yuan. In contrast, TSMC's average bonus per employee for 2025 is only about NT$2.64 million (approximately $87,000).
Discussions about employee rights are gaining momentum on workplace community platforms. With TSMC's annual shareholders' meeting approaching on May 28, these tensions may become more public, offering observers a chance to see how the global chip leader addresses new challenges in employee relations.
Record Profits Amid Bonus Reduction Rumors TSMC's record first-quarter 2025 net profit of NT$572.5 billion, a 58% year-over-year increase, reflects sustained benefits from the explosion in demand for advanced processes driven by global AI infrastructure investment.
However, this strong profitability has not translated into corresponding growth in employee compensation. Instead, rumors of bonus reductions have widened the gap, intensifying internal dissatisfaction.
Employees had generally expected the company to distribute about 13% of retained earnings as bonuses, but this practice is reportedly being reconsidered. Based on 2025 performance, TSMC's average employee bonus is approximately NT$2.64 million (about $87,000), with a total bonus pool of around NT$206.1 billion. While TSMC has promised faster bonus growth in 2026, it has not directly commented on the reduction rumors.
Analysts suggest that the potential bonus cuts are likely due to TSMC's unprecedented capital expenditure scale. The company's annual capital expenditures currently range from $52 billion to $56 billion, as it simultaneously constructs 12 new wafer fabs in the United States, Japan, Germany, and other locations to maintain its technological leadership in 2-nanometer and 1.4-nanometer processes.
This large-scale expansion is continuously draining cash flow, directly reducing the funds available for employee compensation. Many employees feel that the financial costs of the company's global expansion are being partially shifted onto frontline workers.
Samsung and Hynix Agreements Serve as Benchmarks The compensation agreements reached by two major South Korean competitors have brought TSMC employees' dissatisfaction to a boiling point.
On May 27, Samsung Electronics' union approved a plan 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, over the next ten years. Samsung had previously faced the threat of an 18-day shutdown after its union rejected a one-time bonus proposal.
According to KB Securities estimates, if Samsung achieves an operating profit of KRW 327 trillion (about $217 billion) in 2026, the average bonus per employee in the memory chip division could reach around KRW 600 million (approximately $400,000). Notably, employees in non-chip divisions, such as smartphones and home appliances, would receive only about KRW 6 million (roughly $4,000) under the current plan—a difference of about 100 times.
For SK Hynix, an agreement reached in September 2024 removed the previous cap limiting profit-sharing to a maximum of ten months' base salary. Instead, 10% of annual operating profit will now be allocated to the bonus pool. Macquarie Securities estimates that if SK Hynix achieves an operating profit of KRW 447 trillion in 2027, the average bonus per employee among its 35,000 staff could reach approximately KRW 1.29 billion, equivalent to about RMB 6.1 million.
Limited Avenues for TSMC Employee Advocacy Since its founding in 1987, TSMC has never established a union, leaving employees without a formal collective bargaining mechanism—a stark contrast to Samsung and SK Hynix. This institutional gap means current grievances are primarily expressed through informal channels.
Employee complaints have spread to workplace community platforms like Dcard and various TSMC-specific Facebook groups. Topics include whether forming a union is legally feasible and whether the company prioritizes shareholder returns and overseas expansion over the interests of local employees. Some employees are choosing to voice their concerns ahead of TSMC's shareholders' meeting on May 28.
Commenting on the situation, Doris Hsu, Chairperson of silicon wafer manufacturer GlobalWafers, noted that among the 18 factories her company operates across nine countries and regions, some have unions while others do not. She emphasized that the key to corporate performance is not the presence of a union but whether the company shares profits with its employees.
Comments