The AI boom has driven Taiwan Semiconductor's profits to a record high, but it has also sparked controversy among employees over bonus distribution. In response to rumors of shrinking bonuses and growing calls for unionization, C. C. Wei pledged that the company’s profit-sharing bonuses for employees would increase by an average of over 30% this year.
However, amid global capacity expansion and mounting capital expenditure pressures, a potential gap in bonus payouts between Taiwan Semiconductor employees and their counterparts at Samsung and SK Hynix is bringing to light tensions over profit allocation in the AI era.
$Taiwan Semiconductor (TSM.US)$CEO C. C. Wei assured employees that this year’s profit-sharing bonuses would rise by an average of more than 30%, exceeding last year’s increase. This statement followed public expressions of discontent from staff regarding rumors of bonus cuts, highlighting intensifying tensions over profit distribution between tech giants and their workforce during the AI boom cycle.
On Wednesday, Bloomberg, citing a person familiar with the matter, reported that Wei made the above commitment during an internal employee meeting held that day. The source requested anonymity due to the confidential nature of the event. Taiwan Semiconductor confirmed only that the internal meeting took place and had previously stated in a public announcement that it expects the full-year growth rate of its 2026 employee profit-sharing bonuses to exceed that of 2025.
This statement follows recent anonymous posts by Taiwan Semiconductor employees on online forums questioning whether the quarterly bonus increases were justified. Some employees even openly discussed the possibility of forming a union or staging a strike. Meanwhile, Samsung Electronics’ union recently finalized a decade-long compensation agreement, providing a direct benchmark for Taiwan Semiconductor employees’ discontent.
Record-High Profits, Yet Bonus Rumors Point to Cuts
$Taiwan Semiconductor (TSM.US)$Net profit for the first quarter of 2025 reached NT$572.5 billion (approximately USD 18.2 billion), up 58% year-over-year, continuing to benefit from strong global demand for advanced process technologies driven by AI infrastructure investment. However, the impressive financial performance has not quelled internal pay disputes; instead, it stands in stark contrast to rumors of shrinking bonuses.
According to DigiTimes, reports suggesting that Taiwan Semiconductor plans to reduce performance-based bonuses by approximately 15% have spread rapidly among employees. Staff had widely expected the company to allocate around 13% of retained earnings to bonuses, but this longstanding practice is reportedly now under review. Based on 2025 performance figures, the average employee bonus would amount to roughly NT$2.64 million (approximately USD 87,000), with a total bonus pool of about NT$206.1 billion.
Analysts believe the most likely reason for downward pressure on bonuses stems from Taiwan Semiconductor’s unprecedented level of capital expenditures. The company currently allocates USD 52–56 billion annually to capex and is simultaneously constructing 12 new wafer fabrication plants across the United States, Japan, and Germany to solidify its technological leadership in 2-nanometer and 1.4-nanometer process nodes. This massive expansion continuously drains cash flow, directly limiting funds available for employee compensation.
Samsung and SK Hynix Agreements Set Benchmark as Pressure Spreads to Taiwan
What has further inflamed employee sentiment are a series of compensation agreements announced by South Korean rivals.$Taiwan Semiconductor (TSM.US)$On May 27, Samsung Electronics’ union approved a ten-year agreement with 73.7% support, under which approximately 78,000 semiconductor division employees will receive annual stock bonuses equivalent to 10.5% of the company’s operating profit, plus an additional 1.5% in cash incentives. Samsung had previously narrowly avoided an 18-day work stoppage after its union rejected a one-time bonus proposal.
According to KB Securities, if Samsung achieves an operating profit of KRW 327 trillion (approximately USD 217 billion) in 2026, memory chip division employees could receive average bonuses of around KRW 600 million (approximately USD 400,000). At SK Hynix, a September 2024 agreement eliminated the previous cap limiting profit-sharing bonuses to no more than ten months of base salary, instead allocating 10% of annual operating profit to the bonus pool. Macquarie Securities estimates that if SK Hynix reports KRW 447 trillion in operating profit by 2027, its roughly 35,000 employees could each receive an average bonus of approximately KRW 12.9 billion.
By comparison, Taiwan Semiconductor’s per-employee bonus for 2025 is approximately USD 87,000, significantly lower than the potential levels offered by its South Korean counterparts—a gap that has become a key catalyst for employee discontent.
Absence of union mechanisms limits employees’ channels for redress
$Taiwan Semiconductor (TSM.US)$Since its founding in 1987, Taiwan Semiconductor has never established a union, leaving employees without a formal collective bargaining mechanism—a sharp contrast to Samsung and SK Hynix. This institutional void has forced current grievances to be expressed only through informal channels.
Employee grievances have already spread to workplace community platforms such as Dcard and multiple Taiwan Semiconductor–dedicated Facebook groups, with discussions covering the legal feasibility of forming a union and whether the company prioritizes shareholder returns and overseas expansion over the interests of local employees. Some employees have chosen to voice their concerns collectively ahead of Taiwan Semiconductor’s annual general meeting on May 28, raising the likelihood of further public exposure of the tensions.
Doris Hsu, Chairperson of silicon wafer manufacturer GlobalWafers, remarked on the matter, stating that a company’s performance hinges not on whether a union exists, but on whether it shares profits with its employees.
Historical growth rate of the bonus pool and C. C. Wei’s commitment
Historically, the growth rate of Taiwan Semiconductor’s overall employee profit-sharing bonus pool has broadly aligned with the company’s net profit growth. For 2025, the company has allocated approximately TWD 103 billion to this program, representing a 46.6% increase from the prior year. Taiwan Semiconductor’s articles of incorporation stipulate a commitment to allocate no less than 1% of annual profits to employee incentive programs each year.
The more than 30% increase pledged by C. C. Wei exceeds last year’s growth rate but remains below the pace of the company’s net profit growth. Taiwan Semiconductor’s gross margin has risen to 66% this year, and its first-quarter net profit has more than doubled compared to the same period two years ago, driven by sustained surging demand for AI-related products that has significantly boosted profitability.
Throughout his tenure of over a decade as head of Taiwan Semiconductor, C. C. Wei has consistently emphasized stability and long-term thinking. His proactive response to compensation disputes at this employee forum indicates that even this global semiconductor leader cannot avoid mounting public pressure over the distribution of AI-driven windfall gains.
Editor/melody