Samsung Semiconductor Bonus 'Shock'... Lowest Ever Due to Poor First Half Performance

Samsung Semiconductor Mid-Year Performance Bonus
DS Division: 25% of Base Salary
DX Division Shows Variance by Business Unit... Up to 75%

Samsung Electronics' DS Division, responsible for the semiconductor business, saw a sharp decline in its first half performance bonuses due to poor results. This is because it has been posting losses amid the worst semiconductor market downturn since the second half of last year.

On the afternoon of the 5th, Samsung Electronics announced internally that the first half Target Achievement Incentive (TAI) for the DS Division is at about 25% of the monthly base salary. It also explained that the Memory Business Unit, Foundry Business Unit, and System LSI Business Unit within the DS Division will all receive the same level, with payments scheduled for the 7th.

TAI is a performance bonus paid by Samsung Electronics twice a year based on the performance of business divisions and business units. Combining the results of the division and business units, the maximum payment can reach up to 100% of the base salary.

[Image source=Yonhap News]

Since the introduction of the TAI system in 2015, the DS Division had received the maximum 100% until the first half of last year. However, as semiconductor market conditions worsened in the second half of last year, the payment rate dropped to 50%. With the continued deterioration of performance, it fell to a record low of 25% in the first half of this year.

In fact, Samsung Electronics' DS Division posted sales of 13.73 trillion KRW in the first quarter, down 49% compared to the same period last year. It recorded an operating loss of 4.58 trillion KRW, marking a return to losses for the first time in 14 years. There are forecasts that Samsung Electronics' DS Division could record operating losses in the range of 3 to 4 trillion KRW in the second quarter as well.

The DX Division had different payment rates by business unit. The Medical Equipment Business Unit had the highest payment rate at 75%, while the MX (Mobile) Business Unit and VD (Visual Display) Business Unit were at 50%, and the Home Appliances and Network Business Units were confirmed at 25%.

Meanwhile, Samsung Electronics will announce its preliminary second quarter earnings on the 7th. According to the average sales forecast compiled by financial information firm FnGuide, the expected sales are 61.8593 trillion KRW. This would represent a 19.88% decrease compared to the second quarter of last year. The operating profit forecast for the second quarter is 281.8 billion KRW, a 98% plunge.

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