"Willing to Work Weekends to Earn Allowances"... Samsung DS Division Feels the Chill of the Semiconductor Slump
by Kim Pyeonghwa
Published 23 Dec.2023 13:25(KST)
Updated 23 Dec.2023 18:26(KST)
Employees 'Bewildered' by Samsung Foundry's 0% Achievement Bonus Notification
"Year-End Gathering Paid by Samsung Employees" Not Happening This Year
"Should I work on weekends just to secure the performance bonus?"
Recently, such posts have appeared on an anonymous bulletin board used by Samsung Electronics employees, gaining sympathy. Due to the sharp decline in the payment rate of the DS Division's performance bonus this year amid the semiconductor market downturn, some are willing to work weekends to make up for the shortfall.
Earlier, Samsung Electronics announced the payment rate of the second half's Target Achievement Incentive (TAI, formerly PI) and notified employees of their individual evaluations. Only the Memory Business Division managed to secure 12.5%, while the System LSI and Foundry Divisions received 0%, meaning they did not get any performance bonus at all. This is the first time since the system was introduced in 2015 that the payment rate has been 0%. The DS Division received 100% until the first half of last year, but due to worsening market conditions, it dropped to 50% in the second half of that year and 25% in the first half of this year.
Inside the company, the performance bonus freeze is being described as as harsh as the cold weather at the end of the year. While employees understand that such a situation is inevitable given the poor semiconductor market, the actual results have caused considerable surprise. In divisions that receive nothing, some are responding by planning to make up for the lost income through overtime work, while employees who do receive bonuses say the amounts are so reduced that "it barely covers taxes and management fees." When the semiconductor market was booming, there was a saying, "At year-end reunions, Samsung Electronics friends pay," but this time the situation is completely different.
Both inside and outside Samsung Electronics, there is a strong expectation that since the DS Division posted a loss this year, the OPI (Over Performance Incentive) to be paid in January next year is also unlikely to be received. OPI is a performance bonus that can be up to 50% of an employee's annual salary, paid within 20% of the excess profit if the business goals set at the beginning of the year are achieved. Samsung Electronics plans to announce the OPI next week.
SK Hynix also has an excess profit sharing bonus (PS) that can pay up to 50% of annual salary based on yearly performance, but continued losses make payment unlikely. The productivity incentive (PI), which is paid if production targets are met in the first and second halves of the year, is also not expected to be significant. SK Hynix will finalize the second half PI and pay it in January next year.
However, since the semiconductor market is expected to recover starting next year, the 'performance bonus freeze' is also likely to improve. Market forecasts suggest that Samsung Electronics (DS Division) and SK Hynix will return to profitability in the first quarter of next year. With production cuts in the memory semiconductor industry limiting supply and increasing demand from artificial intelligence (AI) and other sectors, Samsung Electronics and SK Hynix's performance is expected to follow an upward trajectory.
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