After the salary controversy, TSMC's CEO steps in to "reassure" staff: promises average employee bonuses will increase by over 30%.

TSMC CEO C.C. Wei promised employees that the average increase in profit-sharing bonuses this year will exceed 30%, higher than last year’s growth rate. This statement came after employees publicly expressed dissatisfaction over rumors of bonus cuts, reflecting heightened tensions over profit distribution between tech giants and workers during the AI boom cycle.

On Wednesday, Bloomberg cited a person familiar with the matter reporting that Wei made this promise at an internal employee meeting that day; the individual requested anonymity due to the internal nature of the event. TSMC only confirmed the internal meeting took place, and in a prior statement said it expects the annual growth of employee profit-sharing bonuses to exceed that of 2025 in 2026.

The backdrop to this promise is that TSMC employees recently posted anonymously on online forums questioning whether the quarterly bonus growth is reasonable, with some openly discussing the possibility of forming a union or even going on strike. Meanwhile, Samsung Electronics’ union just reached a ten-year pay agreement, providing direct reference for TSMC employees’ discontent.

Record profits, rumors point to bonus shrinkage

TSMC reported a net profit of NT$572.5 billion (about US$18.2 billion) for Q1 2025, up 58% year-on-year, continually benefiting from the global demand for advanced processes driven by AI infrastructure investment. However, the outstanding performance hasn’t quelled internal pay disputes and starkly contrasts with rumors of bonus cuts.

According to DigiTimes, news of TSMC intending to cut performance bonuses by about 15% spread quickly among employees. Previously, employees widely expected that the company would use about 13% of retained earnings for bonuses, but this convention is reportedly in doubt. Based on 2025 performance, TSMC employees’ average bonus is about NT$2.64 million (about US$87,000), with the total bonus pool at NT$206.1 billion.

Analysts believe the main reason for bonus pressure is TSMC’s unprecedented capital expenditure scale. TSMC currently spends $52–56 billion annually on capex, building 12 new fabs simultaneously in the US, Japan, Germany, and other places to strengthen its leadership in 2nm and 1.4nm processes. This large-scale expansion continuously drains cash flow and directly squeezes funds available for staff compensation.

Samsung and SK Hynix deals as benchmarks, pressure spreads to Taiwan

What’s fueling TSMC employees’ discontent are a series of pay deals from Korean rivals. On May 27, Samsung Electronics’ union approved a ten-year plan with a 73.7% support rate; about 78,000 semiconductor division employees will receive 10.5% of operating profit as stock bonuses annually, plus a 1.5% cash reward. Samsung almost faced an 18-day shutdown as the union previously refused a one-off bonus plan.

According to KB Securities forecasts, if Samsung’s operating profit hits KRW 327 trillion (about US$217 billion) in 2026, average memory chip division staff bonuses may reach KRW 600 million (about US$400,000). For SK Hynix, a deal reached in September 2024 abolished the cap of “profit-sharing not exceeding 10 months of base salary,” now including 10% of annual operating profit in the bonus pool. Macquarie Securities estimates that if SK Hynix’s 2027 operating profit reaches KRW 447 trillion and there are 35,000 employees, average bonus per person could be about KRW 1.29 billion.

By comparison, TSMC’s average bonus in 2025 is about US$87,000, significantly less than Korean peers, and this gap has become a major catalyst for employee dissatisfaction.

Without a union mechanism, employees’ channels for defending rights are limited

Since its founding in 1987, TSMC has never established a union, and employees lack formal collective bargaining mechanisms, forming a stark contrast with Samsung and SK Hynix. The institutional gap means the latest wave of discontent is vented only through informal channels.

Employee complaints have spread to workplace community platform Dcard and various TSMC-specific Facebook groups, with topics covering the legal feasibility of union formation and whether the company prioritizes shareholder returns and overseas expansion over local employee interests. Some workers chose to voice their concerns collectively ahead of TSMC’s May 28 shareholders’ meeting, potentially taking the conflict public.

Doris Hsu, chairperson of silicon wafer maker GlobalWafers, commented that the key to a company’s performance isn’t whether a union exists, but whether the company shares profits with its employees.

Historical bonus pool growth and Wei’s pledge

Historically, TSMC’s overall employee profit-sharing bonus pool growth roughly keeps pace with company net profit growth. In 2025, the company allocated about NT$103 billion to this program, up 46.6% year-on-year. TSMC’s corporate charter promises at least 1% of annual profits for employee incentive plans each year.

Wei’s latest pledge of over 30% growth exceeds last year’s rate but remains below the company’s net profit growth. TSMC’s gross margin has reached 66% this year, and Q1 net profit has more than doubled compared with two years ago, with surging AI demand significantly boosting profitability.

During his more than ten years as TSMC’s head, Wei has consistently emphasized stability and long-term thinking. This time, proactively addressing pay disputes at an employee meeting indicates that even the global chip industry leader can hardly avoid public pressure on AI windfall distribution.

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