The global memory chip supercycle, fueled by the artificial intelligence boom and translating into historic profits, has led Samsung Electronics and SK Hynix to pay out their largest performance bonuses in years.

After eliminating a long-standing internal cap that limited bonuses to the equivalent of 10 months' base salary, SK Hynix will now allocate 10% of its total operating profit to this year's profit-sharing plan. A significant 80% of the bonus will be distributed in a single lump sum, with the remaining 20% deferred and paid out over a two-year period.

With SK Hynix expecting its full-year operating profit to reach 45 trillion won and a headcount of 3,300 employees, the average bonus per employee is projected to hit 136 million won, approximately 640,000 yuan, setting a new historical record.

Furthermore, SK Hynix has reintroduced an employee stock participation plan, originally launched in 2025. Employees are given the option to receive up to 50% of their bonus in company stock, and upon holding the shares for one year, they will receive an additional 15% cash premium. This initiative is designed to foster long-term alignment between employees and shareholders.

Samsung Electronics' semiconductor division, known as the Device Solutions division, has confirmed that eligible employees will receive a bonus equivalent to 47% of their base annual salary this month. This bonus payout covers the division's three core businesses—Memory, System LSI, and Foundry—marking a substantial rebound from 2023 when the division's bonus rate was zero due to the chip market downturn.

This year's bonus, while slightly below Samsung's internally set cap of 50%, reflects the division's extraordinary recovery. Samsung's performance incentive system, named the "Overachievement Performance Incentive," is distributed annually, with the bonus amount calculated based on 20% of the previous year's Economic Value Added.

For Samsung's Mobile MX division, responsible for the Galaxy smartphone business, the performance dividend has been set at the full 50% rate. Meanwhile, other divisions, such as Consumer Electronics and Networks, will see significantly lower payout ratios, around 12%, contingent on their performance in 2025.

Preliminary earnings released by Samsung on January 8th showed its fourth-quarter operating profit reached a record 20 trillion won (approximately $136 billion). The announcement of the bonus payments followed shortly after these results were disclosed.

Since late 2024, both Samsung and SK Hynix have shifted significant chip production capacity towards High Bandwidth Memory. This shift has led to tightened supplies of general-purpose memory like DDR5, consequently driving up overall prices, as producing HBM consumes approximately three times the wafer capacity of standard DRAM.

For SK Hynix, which holds a dominant position in the HBM market, these margins have translated into record-breaking profits. Samsung, leveraging its broader manufacturing scale, benefits both from the surge in HBM demand and from rising prices in the general-purpose memory sector, where it remains the global shipment leader. Both companies are expected to announce detailed full-year results later this month.

In the secondary market, share prices for both Samsung Electronics and SK Hynix recently hit all-time highs. Samsung's stock price surged to 150,600 won during intraday trading on January 19th, while SK Hynix's stock price reached 793,293 won during intraday trading on January 8th; both companies' shares experienced slight pullbacks on January 20th.

It is noteworthy that the South Korean stock market has risen for 12 consecutive trading sessions, supported by gains in technology and automotive stocks. On Tuesday, January 20th, the Korea Composite Stock Price Index opened lower, fluctuated upwards in the morning session, and had turned positive by the time of writing.