Despite the COVID Crisis... Samsung Semiconductor's '100% Performance Bonus' Expected

Q1 Sales Reach 17.64 Trillion KRW
22% Increase Compared to Same Period Last Year
Positive Outlook Due to DRAM Sales Growth

[Asia Economy Reporter Dongwoo Lee] Despite the poor performance of companies this year due to global economic instability caused by the novel coronavirus disease (COVID-19) pandemic, Samsung Electronics is expected to pay 100% performance bonuses to employees in its semiconductor division.

According to industry sources on the 26th, Samsung Electronics plans to notify its executives and employees early next month about the payment of the Target Achievement Incentive (TAI, formerly PI) for each division. Based on the goals set at the beginning of the year, Samsung Electronics pays TAI twice a year?once in the first half and once in the second half?up to 100% of the monthly base salary depending on the evaluation of each business division.

Despite the crisis caused by COVID-19, the semiconductor division of the DS Division (Device Solutions) is expected to pay 100% performance bonuses for the first half of this year. This is because it recorded sales of 17.64 trillion KRW in the first quarter alone, a 22% increase compared to the same period last year. The increase in demand for data center equipment used in high-capacity semiconductors in the first half of the year is also raising the possibility of 100% performance bonus payments due to the expected increase in server DRAM sales.

The CE Division (Consumer Electronics) is expected to pay performance bonuses at the level of 50-75%, and the VD Division (Visual Display) around 50%. The CE Division's first-quarter sales (10.3 trillion KRW) increased by only 1% compared to the same period last year and fell by 20% compared to the fourth quarter of last year. The VD Division also saw sales (5.65 trillion KRW) decline by 3% year-on-year and 30% compared to the previous quarter during the same period.

The IM Division (IT & Mobile) is likely to see a decrease in performance bonuses compared to 50% in the second half of last year. This is because smartphone sales in the second quarter of this year are expected to decline due to the COVID-19 pandemic, leading to evaluations of the worst "boryetgogae" (a difficult period). Industry insiders expect Samsung Electronics' smartphone sales in the second quarter to be around 52 to 54 million units, a decrease of up to 30% compared to the same period last year.

A Samsung Electronics official said, "The payment of performance bonuses for the first half of this year will be decided between the end of this month and early next month," adding, "Although performance bonuses are expected to be paid to divisions that achieved their targets despite the unprecedented crisis caused by COVID-19, there is some concern as it could be perceived as a 'bonus party'."

This content was produced with the assistance of AI translation services.