Samsung Electronics has announced a significant increase in performance bonuses for its semiconductor division (Image courtesy of Yonhap)
SEOUL, Jul. 5 (Korea Bizwire) – Samsung Electronics, the world’s largest memory chip maker, has announced a significant increase in performance bonuses for its semiconductor division, signaling a recovery in the chip market after a challenging year.
Employees in the company’s Device Solutions (DS) division, which oversees semiconductor operations, will receive bonuses of up to 75% of their monthly base salary for the first half of 2024, according to an internal announcement made on July 4. This marks a substantial increase from last year when the semiconductor industry faced what many called a “chip winter.”
The bonuses, known as Target Achievement Incentive (TAI), are part of Samsung’s performance-based compensation system. Paid twice a year, the TAI can reach up to 100% of an employee’s monthly base salary, depending on the performance of their business unit and division.
For the DS division, the bonus rates vary across different units: employees in the Memory Business will receive 75%, while those in the Foundry Business and System LSI will receive 37.5%. Employees of the Semiconductor Research Center are set to receive 50%.
This represents a significant rebound from last year when bonuses hit a record low. In the first half of 2023, employees from all units in the DS division received only 25% of their base salary as bonuses. The second half of 2023 saw even lower rates, with Memory Business employees receiving 12.5% and Foundry and System LSI employees receiving no bonus at all.
The increase in bonuses reflects the improving fortunes of Samsung’s semiconductor business. In the first quarter of 2024, the DS division reported sales of 23.14 trillion won and an operating profit of 1.91 trillion won, marking a return to profitability after five quarters of losses.
Industry analysts project even stronger results for the second quarter, with estimates suggesting sales around 20 trillion won and operating profits of about 5 trillion won.
The company’s consumer electronics and mobile divisions also saw improvements, with employees from the Visual Display and Mobile Experience units receiving 50% and 75% bonuses respectively, attributed to strong sales of new TV models and the Galaxy S series smartphones.
Samsung Electronics is scheduled to release its second-quarter earnings guidance on July 5, with detailed results expected later this month. The consensus among securities firms suggests a year-on-year increase of 1,119% in operating profit to 8.15 trillion won for the quarter.
Kevin Lee (kevinlee@koreabizwire.com)
