Samsung Electronics and SK Hynix’s performance bonus system overhauls are emerging as a new standard for the global semiconductor industry. Micron Technology’s Taiwan union has shared the two companies’ cases while demanding the elimination of bonus caps and expanded profit sharing, even considering a strike.

According to industry sources and Taiwan’s Liberty Times on the 3rd, Micron’s Taiwan union held a “union strike briefing” on the 30th of last month to discuss performance bonus issues and strike response measures amid the AI boom. The union reportedly shared Samsung Electronics and SK Hynix’s bonus system reform processes and labor-management negotiation cases, highlighting problems with the current bonus structure.

Micron currently operates an IPP (Incentive Pay Plan) that pays cash bonuses reflecting company, organizational, and individual performance against target bonuses. However, the payout cap is limited to 200% of the target bonus, meaning actual payouts effectively cannot exceed roughly five months of salary, according to the union. An RSU (Restricted Stock Unit) program exists for stock-based bonuses, but it’s reserved for a select group of core talent, fueling further dissatisfaction with incentives.

The union argues: “The IPP system should be revised to reference SK Hynix and TSMC’s profit and performance distribution models, and the annual bonus cap should be eliminated like Samsung Electronics in South Korea.” Given Micron’s substantial profits from the AI boom, employees should share in those results, they contend.

As more employees sympathize with these demands, the union is growing rapidly. Union membership, which stood at just around 500 last year, has surged nearly tenfold to approximately 4,000 in less than a year.

Samsung and SK Hynix-Led Bonus Reforms Spread Overseas

Samsung Electronics and SK Hynix, the benchmarks cited by the union, have recently significantly overhauled their bonus systems. SK Hynix’s labor and management agreed last year to allocate 10% of operating profit as the funding source for its Profit Sharing (PS) bonus and to eliminate the bonus payout cap. Samsung Electronics also introduced a special management performance bonus for its semiconductor (DS) division, funded by 10.5% of operating profit, with the cap waived when certain conditions are met.

CategoryBonus Funding SourceCapSK Hynix10% of operating profitEliminatedSamsung Electronics DS Division10.5% of operating profitWaived upon meeting conditions

Note: Based on each company’s labor-management agreements

TSMC Also Faces Bonus Conflict… Chairman C.C. Wei in Damage Control

Bonus-related tensions have also flared at TSMC, Taiwan’s largest company. In May, rumors that bonuses could be cut by up to 15% despite strong first-quarter results (approximately 27 trillion won, approximately $19 billion) sparked internal backlash. Some employees openly discussed forming a union and the need for strikes—topics that had long been considered taboo.

As employee discontent grew, TSMC Chairman C.C. Wei canceled an overseas business trip to hold a town hall meeting with staff. At the meeting, Wei sought to soothe concerns, stating, “This year’s bonuses will increase 30% compared to last year.”

However, when asked about long-term compensation policy, he replied, “I can’t make promises.” He explained, “Samsung’s core DRAM business operates on a structure where one profitable year must sustain the next decade. As a foundry company, TSMC has a different business model, making direct comparisons difficult.”

A Union Wave in Taiwan’s Semiconductor Industry?

Until now, Taiwan’s semiconductor industry has been characterized by a strong reluctance to openly discuss union formation or strikes, despite long working hours and intense job demands. Analysts attribute this to a historical legacy from the Chinese Civil War era, where labor movements were equated with leftist or communist activities. Combined with wariness toward the Chinese Communist Party, this created a culture averse to union organizing.

TSMC engineers reportedly work 12 to 16 hours per day as standard, and are expected to come in on weekends to resolve issues when client requests arise. Despite these conditions, Taiwan semiconductor workers have referred to themselves as “slaves” yet hesitated to take action.

However, the narrative is shifting as Samsung Electronics and SK Hynix unions successfully drove bonus system improvements. Industry analysts predict that following the two companies’ bonus reforms, momentum for expanded profit sharing and elimination of bonus caps will spread to overseas semiconductor firms. Micron’s Taiwan union’s strike potential and internal union discussions at TSMC could serve as the opening salvo.