Samsung Electronics cuts bonuses to chip division employees amid downturn

[Photo by Yonhap]

South Korean tech giant Samsung Electronics Co. will slash bonuses to device solutions (DS) division employees that are responsible for chip production amid a global industry downturn.

Samsung Electronics’ DS division notified employees on Wednesday through an internal announcement that the Target Achievement Incentive (TAI) payout rate had been slashed by half to 12.5 percent.

TAI serves as a metric that allows employees to receive differential payments of up to 100 percent of their monthly base salary based on evaluations of business division and unit performance in the first and second halves of the year.

Within the DS division, different business units faced contrasting situations.

While the default rate stood at 12.5 percent, the Foundry Business Unit and System LSI received 0 percent as the performance bonus rate, with 25 percent given to the Semiconductor Research Institute and the Samsung Advanced Institute of Technology (SAIT), respectively.

Despite signs of a potential recovery amid semiconductor production cuts and price hikes, the DS division still grapples with significant losses.

In the third quarter alone, losses amounted to 3.75 trillion won ($2.87 billion). Although this showcases a decrease in losses compared to the first quarter (4.58 trillion won) and second quarter (4.36 trillion won), the division remains in a considerable loss.

Since the inception of the TAI system in 2015, the DS division had consistently received 100 percent of the base salary as bonuses.

However, due to the semiconductor industry downturn, this figure dropped to 50 percent last year and further plummeted to 25 percent in the first half of this year.

Meanwhile, the payout rates for Samsung Electronics’ Video Display (VD) and Mobile eXperience (MX) divisions were set at 75 percent, while the Consumer Electronics (CE) division employees will be receiving 25 percent of their monthly base salary as bonuses.