TSMC rumored to cut 15% performance bonuses, workers discussing forming a union and even striking

According to DigiTimes, market news that TSMC plans to cut about 15% of performance bonuses has sparked strong dissatisfaction among employees. Some employees have already started discussing forming a labor union in professional communities, even mentioning the possibility of strikes.

This rumor of the bonus reduction emerged after a peak in company performance, quickly pushing the pay contradiction to a climax. TSMC's net profit for the first quarter of 2025 reached 572.5 billion New Taiwan dollars (approximately $17.9 billion), a year-on-year increase of 58%, mainly attributed to the explosive growth in demand for AI chips.

Employees had high expectations for their bonuses. Reports say that employees previously expected the company to use about 13% of retained earnings for distributing bonuses. Based on 2025's performance, the average bonus for TSMC employees could reach approximately 2.64 million New Taiwan dollars (about $87,000), with the total bonus pool amounting to about 206.1 billion New Taiwan dollars.

In response to the rumors, TSMC has not given a straightforward answer. The company simply stated that the rate of increase for employee profit-sharing bonuses in 2026 would be higher than in 2025, emphasizing "full awareness of its growing corporate social responsibility in Taiwan."

High bonuses from South Korean peers intensify dissatisfaction

Pay negotiations from South Korean counterparts further amplify the dissatisfaction among TSMC employees. The Samsung Electronics labor union passed a ten-year compensation package on May 27 with a 73.7% approval rate. About 78,000 semiconductor employees will receive 10.5% of the company's operating profit in stock bonuses and a 1.5% cash reward each year going forward. Previously, Samsung nearly halted operations for 18 days due to union opposition to a one-time bonus payout, ultimately passing a long-term compensation arrangement pegged to operating profits.

SK Hynix also reached a similar agreement in September 2024, eliminating the bonus cap and including 10% of the annual operating profit in the bonus pool. Macquarie Securities estimates that if the operating profit reaches 447 trillion won in 2027, with 35,000 employees, the average bonus per person would be about 1.29 billion won (approximately 610 million RMB).

Bonus reduction may be related to huge capital expenditure

According to media reports citing analyst opinions, the reduction in bonuses may be related to TSMC's capital expenditure scale. TSMC has an annual capital expenditure of 52 to 56 billion dollars, and is currently constructing 12 new semiconductor fabrication plants in parallel in the United States, Japan, Germany, and other locations, to solidify its leading position in 2nm and 1.4nm processes.

Since its establishment in 1987, TSMC has never formed a labor union, and employees have long lacked a formal collective bargaining mechanism. The current wave of discontent has mainly been expressed through online communities, with related discussions spreading to Dcard and multiple TSMC employee Facebook groups. The focus of employees' concerns includes the legality of forming a union, and whether the company prioritizes shareholder returns and overseas expansion over the interests of local employees. Some employees plan to make their voices heard before the shareholders' meeting on May 28th.

Chairwoman of GlobalWafers, Hsu Xiulan, stated that her company owns 18 factories in 9 countries and regions worldwide, some with labor unions and some without. She believes that the key to a company's performance lies not in the presence or absence of a labor union, but in truly sharing profits with employees.