Samsung dangles $560,000 bonuses to keep engineers from China

A Samsung memory chip worker earning about $60,000 a year could receive roughly $560,000 in bonuses before tax, according to the company’s largest union. Its estimate includes both Samsung’s existing profit-sharing bonus and a new special payment. Samsung hasn’t confirmed the amount. On October 7, the company outlined how that special bonus would work: 10.5% of its chip division’s 2026 operating profit would go into an uncapped pool. Samsung plans to pay it in shares, subject to shareholder approval. The next morning, Samsung estimated third-quarter operating profit at 107.4 trillion won, roughly $80 billion, almost nine times the year-earlier figure. Those profits explain how Samsung can afford the payout. Findings released for a parliamentary audit the same week show the competition for the engineers it wants to keep. What did the audit find? The office of Choi Soo-jin, a People Power Party lawmaker on the National Assembly’s science and ICT committee, reviewed LinkedIn and other public career records. It traced at least 27 senior engineers from Samsung and SK Hynix who went on to work at ChangXin Memory Technologies (CXMT), China’s biggest DRAM maker. Together they had spent 415.9 years at the two Korean companies, an average of 15.4 years each. Six were principal or executive-level staff with more than 20 years in mass production. Eight worked in circuit design and seven in process integration. Others came from equipment, yield analysis, and advanced packaging, a mix that Dong-A Ilbo said was enough to run a whole chip factory. Messages from Chinese headhunters obtained by Choi’s office offered pay increases of 60% to 100%, three to five years of guaranteed employment, rental housing, and help with children’s school costs. Fifteen of the 27 didn’t go straight to CXMT. They first took jobs at equipment or materials suppliers, foreign companies, or universities. Choi’s office said that may have been a way around non-compete agreements, which usually last one to two years. Why does it matter that they left CXMT? The engineers stayed at CXMT for 2.9 years on average. According to their public profiles, 26 of the 27 have since left, and seven moved on to other Chinese chip companies, including Huawei’s Hong Kong research center and HiSilicon. Public career records don’t establish why they left or whether any technology was transferred. But CXMT grew quickly over the same years. Its research and development staff rose from 2,606 at the end of 2022 to 7,491 in June 2026, and in September it said its fifth-generation DRAM was in mass production. Choi’s office suggested CXMT had drawn on the engineers’ experience to build its factories and stabilize production. That illustrates the retention problem: experienced engineers can help a competitor build capabilities that remain after they leave. Why bonuses rather than bans? Seoul’s legal tools are limited. “There is no legal basis to crack down on or restrict lawful overseas hiring,” Korea’s industry ministry said, according to Dong-A Ilbo. Non-compete clauses expire, and the detours through suppliers and universities suggest they can be waited out. Interest in working abroad extends beyond the chip industry. In a Bank of Korea survey of 2,694 researchers with master’s or doctoral degrees, 42.9% of those working in Korea said they were thinking about moving abroad within three years. So the companies are competing on pay. SK Hynix moved first. Its profit-sharing system sets aside 10% of operating profit for employees, and a labor deal in late 2025 removed the old cap of 1,000% of base salary for the next 10 years. The first payout under the new terms came to 2,964% of base salary, with a fifth of each payout deferred over two years, KED Global reported. A company official told the outlet the system was expected to curb talent losses to domestic and overseas rivals. Samsung’s new plan follows the same logic. The special bonus arrives as shares, and most of them can’t be sold right away. Workers can sell a third immediately, another third after one year, and the last third after two years. That ties two-thirds of the payout to Samsung’s share price for up to two years. Those holding periods alone don’t establish whether employees must stay to keep the award. It is expensive. Samsung counts the bonus as a cost before it pays it, and it set aside about 15.4 trillion won for the first half of 2026. The Korea Economic Daily estimated the third-quarter charge at about 11.4 trillion won. Is pay enough? I’d argue keeping experienced engineers in Korea has become a national-security concern. Pay is one way chipmakers can respond. Bonuses on this scale give workers more reason to weigh an overseas offer against what they would leave behind. But an uncapped bonus isn’t a guaranteed one. If memory profits fall while overseas offers stay generous, Samsung and SK Hynix will have a harder time competing on pay. Choi wants a national system to track key personnel and incentives to bring them back to jobs in Korea. “Semiconductor technology is not just blueprints,” she said. “It is the experience and know-how that people have built up over 20 to 30 years.” For now, record profits give the chipmakers room to pay more. The test is whether they can keep those engineers through the next downturn. David Han is the founder of AIStockWire.com, which covers Korean chipmakers and AI stocks. The lawmaker’s and ministry’s comments are translated from Korean.