Even last year, the Mobile eXperience (MX) Business Division posted strong operating profit, so the cap for the overachievement performance incentive (OPI), set at 50% of annual salary, applied. But this year, I am anxious because incentives seem likely to shrink sharply due to higher component prices. If the Device Solutions (DS) institutional sector sees operating profit surge this year and even the OPI cap disappears, the gap with the MX Business Division could widen significantly. I feel a sense of relative deprivation. (A from Samsung Electronics MX Business Division)
Samsung Electronics' bonus dispute is spreading beyond the DS institutional sector, which handles semiconductors, to the MX Business Division. As the DS institutional sector pushes to abolish the OPI cap amid a semiconductor upturn, employees in the MX Business Division, which handles the smartphone business, are voicing discontent that "the fruits of the semiconductor boom go to DS, while MX bears the burden of higher component costs."
◇ 424 trillion won in facility investment over 10 years… 83% in semiconductors
An analysis by ChosunBiz on the 10 years of Samsung Electronics business reports (2016–2025) on the 20th found that cumulative facility investment from 2016 to 2025 was 424.4503 trillion won. Of that, semiconductor investment was 353.2395 trillion won, accounting for 83.2% of the total. If you add display panel investment included in the DS institutional sector through 2021 and Samsung Display investment disclosed separately since 2022, component business investment rises to 400.7558 trillion won. Over the past 10 years, 94.4% of total facility investment has been concentrated in component businesses such as semiconductors and displays.
MX Business Division employees' dissatisfaction stems from this. When the smartphone business was booming, MX employees could not be fully compensated for overachievement due to the OPI cap, and there is a perception that much of the company's investment capacity was allocated to the semiconductor business. Conversely, in a phase like this year when the semiconductor cycle improves, if only the DS institutional sector enjoys the benefit of abolishing the OPI cap, the compensation gap between divisions could become excessive.
Samsung Electronics' OPI is a bonus system paid once a year based on each business division's excess profits. If a division's performance exceeds its early-year target, the funding is calculated based on metrics such as economic value added (EVA), and individuals can receive up to 50% of their annual salary, according to reports. The union is demanding the abolition of the current OPI cap and institutionalizing a system that links the bonus funding calculation standard to operating profit.
The problem is that rising semiconductor prices have opposite effects across business divisions within Samsung Electronics. For the DS institutional sector, higher memory prices are a driver of improved results, but for the MX Business Division, which makes smartphones, they act as a factor raising core component costs. The semiconductor boom is simultaneously fueling expectations of larger bonuses on one side and concerns about reduced OPI on the other.
◇ The semiconductor boom as an internal conflict factor… risk borne companywide, rewards concentrated in DS
Samsung Electronics employees are increasingly frustrated that the company has borne the risk of large-scale semiconductor investments together companywide, yet rewards are split based on each division's excess profits. Semiconductors require large upfront investments; in downturns, losses can be large enough to shake overall results, but in upturns, they can generate massive profits. Last year, the Samsung Electronics DS institutional sector posted 24.9 trillion won in operating profit, accounting for 57.1% of the companywide operating profit of 43.6 trillion won. Last year, the combined operating profit of the MX and Networks divisions was 12.9 trillion won, making up 29.6% of companywide profit.
It is true that semiconductor results drove companywide profitability last year, but in the past, the mobile business was also a key pillar of Samsung Electronics' profits. Although today's MX and Networks divisions are not exactly the same in scope as the former IM institutional sector, during the smartphone heyday in 2013, the IM institutional sector recorded 24.96 trillion won in operating profit, accounting for 67.8% of Samsung Electronics' companywide operating profit of 36.79 trillion won at the time.
An employee of the Samsung Electronics MX Business Division said, "When semiconductors struggled, we endured the companywide performance deterioration together, but when things improve, if it looks like only DS takes the rewards, morale will inevitably drop," adding, "Even if we recognize division-by-division performance, there needs to be a discussion on how to reflect company-level investment and risk-sharing in the compensation system."
◇ MX faces rising cost pressures… anxiety spreads over "this year's OPI shrinking"
Inside and outside the MX Business Division, anxiety is spreading that "this year, excess profits will plunge due to cost pressures such as semiconductors, leading to reduced bonuses." The smartphone business is sensitive to rising component prices. When unit prices of core components such as memory, application processors (AP), and displays rise, the company must either raise selling prices or accept lower profitability. Since indiscriminately raising consumer prices is difficult, higher component costs inevitably pressure the MX Business Division's profit margin.
By contrast, in the DS institutional sector, higher memory prices translate into improved sales and operating profit. Expectations for a semiconductor upturn are growing with rising demand for artificial intelligence (AI) servers and for high-bandwidth memory (HBM) and other high value-added products. Among DS employees, the view is spreading that, having endured the downturn, they should share more of the excess profits in the upturn.
Samsung Electronics is a company with strong characteristics of divisional independent accounting. A system that rewards based on each division's performance can provide clear motivation to members. However, for businesses like semiconductors that require companywide financial strength, credit, and long-term investment capacity, there are growing concerns that dividing rewards solely by a specific division's results can create a sense of deprivation among employees in other divisions.
In particular, the sense of relative deprivation among MX Business Division employees is bound to grow. That is because there is a strong perception that the profits generated by the smartphone business were used as companywide investment funds, a substantial portion of which flowed into semiconductor investments. The MX Business Division has played the role of a stable cash generator for Samsung Electronics by selling Galaxy smartphones, tablets, and wearable devices. Even when the semiconductor cycle weakened, the smartphone business served as a pillar defending companywide results.
Ultimately, the crux of Samsung Electronics' bonus dispute is shifting from "who earned how much" to "who shared which risks and investments." While the semiconductor upturn is a boon to Samsung Electronics' overall performance, internally it is becoming a factor that widens compensation gaps between divisions and fuels fairness debates.