"Chinese Employees Demand Performance Bonuses Too"... Samsung Electronics and SK hynix Face Calls for Bonus Increases at China Plants

Demands for Higher Performance Bonuses Spread to Chinese Plants
"Headquarters Bonus Levels Already Shared Among Local Staff"
Rising Labor Costs Emerge as a New Challenge Amid Expansion of North American Production Sites

It has been confirmed that Samsung Electronics and SK hynix are facing demands for increased performance bonuses not only from their headquarters staff but also from local employees at their production sites in China. There are concerns that the compensation controversy, which began in Korea, has now spread to their Chinese manufacturing bases. As a result, this could potentially add pressure to the global labor cost structure and profitability of their businesses.

On the 23rd of last month, union members are shouting slogans at the Samsung Electronics Labor Union Joint Struggle Headquarters' 'Change Transparently and Abolish the Cap - 4/23 Struggle Resolution Rally' held in front of the Samsung Electronics Pyeongtaek Campus in Pyeongtaek, Gyeonggi Province. Photo by Yonhap News Agency

According to New Daily on the 6th, demands for higher performance bonuses have been raised by locally hired employees at the Samsung Electronics Xi’an semiconductor plant and the SK hynix Wuxi plant in China. As both companies have seen significant performance improvements and growing expectations for bonus payments due to the boom in artificial intelligence (AI) semiconductors, a sense of relative deprivation is spreading among overseas employees as well.

"Everyone Knows How Much Headquarters Employees Get"… Growing Discontent Among Locals in China

An industry official told the media, "Local employees are generally aware of the level of performance bonuses received by headquarters staff. As news about the results and bonuses of Samsung Electronics and SK hynix is shared in real time on local portals like Baidu in China, calls for increased bonuses are rising."

In particular, the SK hynix Wuxi plant is regarded as a key base responsible for a significant portion of the company’s total DRAM production, with at least 7,000 employees reportedly working there. The Samsung Electronics Xi’an plant is also the company’s only overseas NAND flash production base, accounting for about 40% of total production. The number of locally hired employees is estimated to be at least 3,000.

SK hynix has acknowledged its awareness of the situation. The company stated, "We operate our bonus system in accordance with the characteristics and systems of each country." In contrast, Samsung Electronics adopted a cautious stance, saying, "It is difficult to confirm."

Beyond China to the US?… Concerns About Growing Pressure

The industry is paying attention to the possibility that this movement may not be limited to Chinese sites alone. As global production bases expand, changes in compensation levels in specific regions could trigger a chain reaction, spreading to other overseas operations as well.

Image to aid understanding of the article. The Asia Business Daily DB

In fact, Samsung Electronics is investing approximately $17 billion to build a new foundry in Taylor, Texas, with the goal of full-scale operation in 2026. SK hynix is also investing $3.87 billion to construct an advanced packaging plant in Indiana, United States. Mass production is scheduled to begin in the second half of 2028, with the creation of several hundred new jobs expected.

The issue is that wage levels at North American sites are already high. If performance bonus standards face upward pressure globally, there are concerns that labor costs could rise much faster than anticipated.

Experts say, "If the demands of local employees in China are accepted to some extent, it will inevitably affect operations in North America and Europe. Particularly at US plants, where base labor costs are high, expanding performance bonuses could have an even greater impact on profitability."

The industry analyzes that while the AI semiconductor boom is driving continued improvements in business performance, global labor costs and compensation are emerging as new management variables. Opinions suggest that performance bonus systems are now directly tied to global production strategies and profitability, going beyond the level of simple employee welfare.

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