Samsung Boosts Pay to Retain Chip Talent, But Foundry Lags

Samsung is boosting compensation as engineers weigh offers from rival SK hynix, but the gap between its memory and foundry businesses remains wide.

Samsung's Device Solutions division reached a labor agreement in May establishing a special performance bonus pool equal to 10.5% of agreed business performance, with no cap. Forty percent of the pool is shared across DS, while the remaining 60% varies by business-unit performance.

The arrangement followed SK hynix's move to tie employee bonuses to 10% of operating profit. MIT Technology Review estimated bonuses of roughly $400,000 for Samsung memory employees this year, compared with about $476,000 at SK hynix and about $135,000 for Samsung foundry workers.

Those figures are estimates of performance compensation, not total pay packages, but the gap has become a retention issue. A union survey conducted June 17-30 found that 81.5% of foundry respondents said their intention to change jobs within two years was high or very high.

The survey covered 8,297 DS employees overall, including 1,462 foundry respondents. The comparable figure for Samsung's memory business was 32.7%.

Samsung Electronics union leader Choi Seung-ho also said in April that more than 200 union members had moved to SK hynix during the previous four months.

Samsung's total employee salaries at its South Korean headquarters rose 6.8% in the first half of 2026, from 7.50 trillion won to 8.01 trillion won, while headcount slipped from 129,524 to 129,200, according to the company's half-year figures reported by UPI.

What Samsung's chip pay programs cover so far

The DS performance deal is the broadest confirmed change.

Under the agreement, 40% of the special bonus pool is distributed at the DS-wide level, while 60% depends on the performance of individual business units. The agreement runs for 10 years and uses company shares for the special bonus payments.

For the stock portion, one-third of granted shares can be sold immediately, while the remaining shares are subject to one- and two-year sale restrictions.

The treatment of loss-making businesses is especially important for foundry and System LSI. Under the agreed framework, those units are due to receive 60% of the DS-wide payout rate, but implementation of that provision was deferred for one year.

That formula is already becoming part of the next labor discussion. MoneyToday reported Sept. 22 that the union plans to make compensation for foundry and System LSI a key issue in the next round of collective bargaining.

Samsung also operates a separate "Key Talent" program for selected employees. MoneyToday reported that 6.7% of memory-business employees received special incentives last year, with individual awards ranging from 10 million won to more than 100 million won.

In March, Samsung granted 2,039,151 treasury shares to 9,663 employees for what the company described as the retention and motivation of key talent. Samsung's disclosure puts the final value of that distribution at about 406.6 billion won, or roughly 42 million won per recipient on average.

The awards were not limited to semiconductor employees, and Samsung's filing does not break down how many went to foundry, memory or other businesses.

Samsung has committed even more stock to employee compensation. In August, the company approved a 15 trillion won treasury-share repurchase for stock-based compensation tied to 2026 business performance, including performance incentives and special management performance incentives.

That repurchase establishes the pool of shares. It does not yet show how much compensation individual DS businesses, including foundry, will ultimately receive.

Why Samsung's foundry pay gap remains

The structure of the DS bonus system helps explain why employees within the same semiconductor division can receive very different payouts.

Samsung's memory business is benefiting heavily from demand for HBM and other AI-related memory. Foundry has been in a weaker financial position, so a formula that puts 60% of the special bonus pool behind business-unit performance produces a much smaller payout for foundry workers.

Samsung does not separately disclose foundry operating profit in its quarterly earnings, so its precise current loss cannot be independently calculated from the company's financial statements.

The company did say in its second-quarter results that foundry earnings "improved significantly" before incentive-related provisions, helped by HBM base-die demand and stronger US customer orders. Samsung is targeting double-digit foundry revenue growth in the second half.

That improvement has not removed the compensation divide.

The June union survey found 81.5% of foundry respondents had a high or very high intention to change jobs within two years, compared with 75.4% in System LSI and 32.7% in memory.

MIT Technology Review also quoted a Samsung foundry engineer who said nearly his entire 30-person team applied for a July SK hynix opening. That is one employee's account rather than companywide attrition data, but it aligns with the broader dissatisfaction recorded in the union survey.

The court injunction is narrow, not a broad retention tool

Samsung has also used special incentive agreements with selected key employees alongside non-compete provisions.

A South Korean court granted Samsung a preliminary injunction preventing two former NAND flash design employees from working at SK hynix or its affiliates for 18 months, according to MoneyToday.

The two employees had received special incentive agreements worth 30 million won and 12 million won, respectively. The court considered the payments compensation for their non-compete obligations and also noted their access to NAND design technology treated as nationally important.

The ruling applies to those two employees and does not establish that Samsung can impose the same restriction broadly.

MoneyToday cited an industry official who said non-compete clauses are more difficult to enforce against ordinary employees and are more likely to hold up when separately compensated key personnel are involved.

Samsung's incentives do not always prevent departures, either. MoneyToday reported that one employee declined a package that included self-development leave, doctoral-study support, a 30 million won retention incentive and an additional 100 million won non-compete payment before leaving for a competitor.

Why foundry retention matters beyond payroll

Samsung's memory and foundry businesses increasingly overlap in AI chips.

HBM4 uses a logic base die produced with advanced foundry processes. Samsung plans to manufacture its own HBM4 base dies on its 4-nanometer foundry process, while SK hynix has partnered with TSMC on HBM4 base-die production.

That makes experienced foundry engineers relevant not only to Samsung's contract-chip business but also to its ability to compete in advanced HBM.

Samsung said in July that foundry demand was improving as it expanded HBM base-die production and secured additional advanced-node work. Its partnerships and design wins have also broadened, including agreements involving major US technology customers.

The workforce pressure has not disappeared with that recovery.

Samsung's DS union is already preparing to revisit how loss-making units are treated in the bonus formula, with foundry and System LSI compensation expected to be central issues in the next bargaining cycle.

What's confirmed is that Samsung has expanded stock-based compensation, established a 10-year DS performance-bonus framework and committed billions of dollars' worth of shares to employee compensation programs.

What's still unclear is how much of those broader awards will ultimately reach foundry employees and whether the new structure will narrow the retention gap with Samsung's profitable memory business and SK hynix.