Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) CEO promises to increase employee bonuses by over 30%, with AI dividends providing extra motivation and boosting morale.

The chief executive officer of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) Wei Zhejia told employees on Wednesday that this year's average profit sharing bonus will increase by more than 30% in response to concerns from some employees about the incentive program. As a key pillar of the global AI infrastructure, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is expanding its employee incentive plan as profits soar. According to sources, Wei Zhejia stated at an internal company meeting on Wednesday that he was confident the year-on-year average profit sharing bonus for employees in Taiwan would increase by over 30%, surpassing last year's growth rate. Wei Zhejia's statement highlights that as major beneficiaries in the historic prosperity of AI development and spending, there is increasing pressure to allocate more rapidly growing revenue to employees. Earlier this week, Samsung Electronics reached an agreement with its major union to distribute approximately $27 billion in bonuses to employees, after union leaders had threatened to go on strike. The commitment from the CEO of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR comes after several days of online discussions regarding quarterly bonuses, with some anonymous posts questioning the size of the bonus increase. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR confirmed that an internal employee meeting was held, but did not further comment. The company stated in a statement earlier this week that it is very confident that the annual growth rate of employee profit-sharing based on performance assessments will exceed last year's level. Wei Zhejia has been in a leadership position at Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR for over ten years, consistently emphasizing stability and long-term thinking in the company's strategy. During the pandemic, he repeatedly stated that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's pricing would be strategic rather than opportunistic, a strategy that has proven to be effective - the company successfully increased its gross profit margin to an enviable 66% this year. In the first quarter financial report released in April, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR achieved revenue of NT$1.134 trillion (approximately $35.9 billion), a 35% year-on-year increase, almost doubling the growth rate from the same period last year. Net profit reached NT$572.5 billion, a 58% year-on-year increase, more than double the same period two years ago (approximately NT$280-290 billion). This outstanding performance in the financial report, with significantly higher than expected net profit, gross profit margin, and operating profit margin, has greatly strengthened the company's profitability. The gross profit margin reached a historic breakthrough of 66.2%, expanding by nearly 4 percentage points from the previous quarter's 62.3%, significantly exceeding the market's estimated 64.5%. The size of the overall employee profit-sharing pool at Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR roughly increased in sync with net profit last year. The company allocated approximately NT$103 billion for this plan in 2025, a 46.6% year-on-year increase. According to the company's articles of association, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR commits to using at least 1% of annual profits for incentive plans. The timing of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR holding an employee meeting coincides with the temporary resolution of the months-long standoff between Samsung, the South Korean chip giant, and its largest union. Unlike this South Korean company with the highest market value, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR does not have a union, but its employees had previously begun expressing dissatisfaction on online forums. Just the day before (May 26), South Korean Minister of Employment and Labor Jin Yong-hun personally intervened, and Samsung Electronics and its union had just reached a dramatic temporary salary agreement on the eve of the strike, successfully avoiding the scheduled comprehensive strike starting on May 21 and lasting 18 days. This turmoil stems from Samsung's epic surge in profits amid the AI boom: the first quarter of 2026 saw operating profits reach 57.2 trillion Korean won, a 756.1% year-on-year increase. The union initially demanded that 15% of the operating profit of the semiconductor department be allocated as an annual guaranteed bonus, and negotiations had reached a deadlock. The agreement eventually reached stated that employees of the semiconductor (DS) department would receive 10.5% of the annual operating profit in the form of a "special operational performance bonus" in stock form, plus an additional 1.5% cash reward, with a duration of ten years and no upper limit on payouts. Based on this calculation, the average bonus for employees in the storage chip department could reach approximately 600 million Korean won, equivalent to approximately $400,000 (approximately 2.7 million RMB). In contrast, just over a month ago, the Samsung union had threatened to launch a comprehensive strike if their demands were not met, with about 57,000 members prepared to initiate the strike. A one-day strike in April had caused Samsung's factory capacity to drop by 58%.