Samsung Electronics Pyeongtaek . (Image courtesy of Samsung Electronics)
SEOUL, July 4 (Korea Bizwire) — Samsung Electronics will significantly reduce performance bonuses for its semiconductor division in the first half of 2025, reflecting continued weakness in its foundry and NAND flash businesses.
According to an internal announcement made on July 4, employees in the Device Solutions (DS) division — responsible for the company’s semiconductor operations — will receive performance incentives equivalent to a maximum of 25% of their monthly base salary, far below the 100% maximum allowed under Samsung’s Target Achievement Incentive (TAI) system.
Within the DS division, payout rates vary by business unit: memory will receive the full 25%, system LSI and the semiconductor research center 12.5%, while the foundry unit, which has posted significant losses, will receive no bonus at all. Senior executives in the DS division will voluntarily forgo their bonuses to underscore their commitment to performance recovery.
The move marks a stark contrast from 2015 to 2022, when the DS division consistently earned the maximum TAI payout. Bonus cuts began in late 2022 amid a severe downturn in the global semiconductor market and worsened in 2023, when the foundry and system LSI units received no bonuses and memory just 12.5%.
Samsung Galaxy S25 Edge. (Image courtesy of Yonhap)
Although performance incentives rebounded in late 2024 amid signs of recovery — with the memory unit receiving up to 200% of monthly salary — the first half of 2025 has seen fresh challenges. Analysts expect sharp profit declines in NAND flash and continued multi-trillion-won losses in foundry and system LSI operations.
By contrast, Samsung’s Device Experience (DX) division, which includes consumer electronics and mobile, fared better. The Mobile Experience (MX) division, buoyed by strong sales of the Galaxy S25 smartphone, will receive a 75% bonus — the highest across Samsung business units. The consumer electronics division will receive between 37.5% and 50%.
Samsung’s affiliated companies also disclosed their TAI payouts. Samsung Display awarded 75% bonuses for large panel divisions and 100% for small and mid-sized panel units. Samsung Electro-Mechanics set bonuses at 100% for its MLCC component division and 75% for others. Samsung SDI, however, announced minimal incentives: 25% for its electronic materials division and 0% for all battery-related units.
Samsung is expected to announce its preliminary second-quarter earnings on July 8, with consensus estimates projecting sales of 75.6 trillion won and operating profit of 6 trillion won. Detailed business segment results will follow later in the month.
M. H. Lee (mhlee@koreabizwire.com)
