Kioxia shareholders urge chipmaker to share profits as Korean bonus battle spills into Japan

TOKYO — Bonus disputes that have roiled Korea's semiconductor industry are spreading to Japan, where shareholders of Japanese memory chipmaker Kioxia are pressing the company to increase employee payouts.

The Japanese business daily Nikkei reported Monday that the global chip boom has fueled demand for larger payouts at the country’s semiconductor companies, including Kioxia.

"If the company doesn't share the profits with employees, they'll simply leave for another company,” a shareholder was quoted as saying during Kioxia Holdings' annual general shareholders’ meeting in Tokyo on Thursday. “People need to be rewarded if they're expected to stay motivated."

Spun off from Toshiba Memory in 2019, Kioxia became Japan's most valuable listed company on June 12, surpassing Toyota Motor and SoftBank Group in market capitalization. The company was listed on the Tokyo Stock Exchange in December 2024.

The Nikkei reported that Kioxia shareholders called for compensation to match that of global rivals.

Noting that labor and management at Korean giants Samsung Electronics and SK hynix have clashed over bonus payments, the paper added that Japanese companies led by Kioxia can no longer avoid the same debate.

In particular, the Nikkei cited SK hynix’s agreement during last year's wage negotiations to allocate 10 percent of its operating profit to employee bonuses.

"Based on market forecasts for SK hynix's operating profit, each employee could receive annual bonuses of roughly 70 million yen [$45,300]," it said.

"Rival Samsung Electronics did not remain idle,” the paper added. “After its union cited the widening compensation gap with SK hynix and even threatened strikes, the company agreed in May to allocate 10.5 percent of business performance to the bonus pool."

However, the Nikkei noted that Samsung determines bonuses by business division, meaning employees in its memory chip division receive far larger payouts than those in its foundry, smartphone and home appliance units, creating a new source of disparity within the company.

Taiwanese semiconductor company TSMC, which does not have a labor union, has long distributed bonuses equivalent to about 12 percent of its net profit.

At its shareholder meeting in June, management reassured employees by saying bonuses in 2026 were expected to increase by more than 30 percent, matching or exceeding the growth seen over the past three years.

Kioxia is expected to post an operating profit of 7.39 trillion yen in fiscal 2026, eight times the previous fiscal year's profit.

The Nikkei estimated that if the company allocated 10 percent of its operating profit to bonuses, each employee could receive about 50 million yen.

However, the newspaper said that Kioxia's compensation system remains largely based on the framework established during its Toshiba Memory days, hindering such unprecedented bonus payments. As a result, the compensation gap between Japanese companies and their Asian rivals is expected to widen for the time being.

Not all employees have missed out, as some have earned substantial amounts through stock options instead of bonuses.

The Japanese media reported on Saturday that about 600 of Kioxia's roughly 15,000 employees are estimated to have earned investment gains of around 1 billion yen each through stock options introduced when a Bain Capital-led consortium acquired the company from Toshiba in 2018.

BY YOU SEONG-UN [[email protected]]