SMIC Rewards Management
China’s largest semiconductor fab SMIC (688981.CH), was feeling generous after a good year in 2020.. The company gave its CEO, a former R&D Director at Taiwan Semiconductor (TSM) a bit of a raise, more than quadrupling his salary from 2019’s $341,000 to $1.53m, along with a ‘gift’ of $3.4m in SMIC stock, making him the company’s highest paid employee. While SMIC recently received funding from the Shenzhen government to build a $2.5b foundry, an outgrowth of both China’s desire to lessen its dependence on outside semiconductors and components and the global semiconductor shortage, the large salary increase at SMIC is an indication that China is ready to spend in order to attract the talent necessary to build out it semiconductor infrastructure.
Despite grandiose plans for semiconductor capacity in past years, a number of projects were cancelled or abandon, not due to lack of funding, but more due to a lack of experienced mangers that could both coordinate construction and manage the potential operations. China now seems a bit more willing not just to offer higher salaries to attract Japanese, Taiwanese, or Korean talent, but to make an obvious point of rewarding them when they perform well. Nothing attracts talent like a big bonus.
Despite grandiose plans for semiconductor capacity in past years, a number of projects were cancelled or abandon, not due to lack of funding, but more due to a lack of experienced mangers that could both coordinate construction and manage the potential operations. China now seems a bit more willing not just to offer higher salaries to attract Japanese, Taiwanese, or Korean talent, but to make an obvious point of rewarding them when they perform well. Nothing attracts talent like a big bonus.
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