High housing prices are to blame: SMIC’s employee turnover rate exceeds 20%, 5 times that of TSMC

According to the data disclosed in SMIC’s “Corporate Social Responsibility Report 2018”, the company’s employee turnover rate was 22% that year, which was about 1.3 times the industry average. Among them, the employee turnover rate of the Shanghai, Beijing, and Shenzhen factories accounted for 52.2%. , 25.7%. 11.7% are the top three cities with the highest churn rate.

High housing prices are to blame: SMIC’s employee turnover rate exceeds 20%, 5 times that of TSMC

According to the Securities Times·e company report, at present, SMIC, the most advanced chip foundry manufacturer in China, has entered the official issuance stage. According to an announcement issued by SMIC on July 5, it is estimated that the issue price is 27.46 yuan per share, and the amount of SMIC’s fundraising this time may reach about 45 billion yuan. This financing scale may rank seventh in the historical financing amount of A-share IPO, after Industrial and Commercial Bank of China and before Ping An of China.

For asset-heavy chip foundries, sufficient funds in hand are equivalent to upgrading the process and the money burning competition, adding a winning bargaining chip.

High housing prices are to blame: SMIC’s employee turnover rate exceeds 20%, 5 times that of TSMC

However, chip foundries are also talent-intensive industries, and how to attract and retain talents is also a challenge that domestic chips must face. The current practical problem is that the talent gap of hundreds of thousands of chips has not been filled, and domestic chip companies, especially in the manufacturing process, are still facing the problem of a high turnover rate of talents. As the leading domestic chip manufacturer, SMIC cannot avoid this problem either.

In terms of the talent gap, according to the data released in the “White Paper on Talents in China’s Integrated Circuit Industry (2018-2019 Edition)” (hereinafter referred to as the “White Paper”), it is estimated that by 2021, the demand for talents in the entire chip industry will be about 722,000. The demand gap of 261,000 people.

Since chip talents are in short supply, the turnover rate in the industry should be low. After all, recruitment is not easy. Enterprises should find ways to retain talents so as to effectively reduce the cost of human resources. However, this is not the case. The data in the white paper shows that the active turnover rate of the chip industry in 2018 was 14.3%, of which the active turnover rate of chip manufacturing was the highest, reaching 17.1%, and the lowest was chip design, with an active turnover rate of 9.8%.

Even more unexpectedly, SMIC’s employee turnover rate is higher than the industry average.

According to the data disclosed in SMIC’s “Corporate Social Responsibility Report 2018”, the company’s employee turnover rate was 22% that year, which was about 1.3 times the industry average. Among them, the employee turnover rate of the Shanghai, Beijing, and Shenzhen factories accounted for 52.2%. , 25.7%. 11.7% are the top three cities with the highest churn rate.

High housing prices are to blame: SMIC’s employee turnover rate exceeds 20%, 5 times that of TSMC

In terms of age, employees under 30 have the highest turnover rate, accounting for 79.3%. Since the group of employees under the age of 30 mainly includes fresh graduates from colleges and universities, and junior talents with about 5 years of work experience, they are the company’s technical reserves, and chip manufacturing emphasizes the accumulation of skills and experience, which means SMIC A large number of talents cultivated internationally were lost before they had time to bear fruit.

It is understood that most of the people who left SMIC have chosen to go to companies such as Samsung, Intel and TSMC.

High housing prices are to blame: SMIC’s employee turnover rate exceeds 20%, 5 times that of TSMC

On the contrary, TSMC’s employee turnover rate is quite low. According to the data disclosed in TSMC’s “2019 Corporate Social Responsibility Report”, in the five-year period from 2015 to 2019, the highest voluntary turnover rate of employees did not exceed 5%, and the lowest was only 4.1%. In 2019, it was 4.8%.

High housing prices are to blame: SMIC’s employee turnover rate exceeds 20%, 5 times that of TSMC

According to this calculation, the voluntary turnover rate of domestic chip manufacturing employees is more than three times that of TSMC, and SMIC’s turnover rate data is more than five times that of TSMC.

The extremely low turnover rate of TSMC’s employees is easy to understand. The company is a leader in the industry and has a good salary. If you dare to throw money, you can keep people. From the salary data released by TSMC, the median salary of the company’s employees in 2019 is 383,000 yuan, which means that most employees’ income exceeds 380,000 yuan.

What is SMIC’s salary? According to the data disclosed in its “Prospectus”, the average salary of R&D personnel in 2019 is 367,000 yuan.

High housing prices are to blame: SMIC’s employee turnover rate exceeds 20%, 5 times that of TSMC

It seems that there is not much difference, but there are two points to note:

One is that 367,000 yuan is the average salary. Generally speaking, the median is less than the average, which means that most R&D personnel have an annual income of less than 367,000 yuan;

Second, in chip manufacturing plants, the income of R&D personnel is usually higher than that of ordinary employees.

In summary, it can be estimated that the overall salary of SMIC’s employees (except for executives and core employees) is lower than that of TSMC.

In fact, the gross profit margin of the two companies can also roughly see their salary gap. From 2017 to 2019, TSMC’s gross profit margin has been more than twice that of SMIC. The company’s pot is full, and the employee’s bowl will not be empty. It is a simple truth.

Although the salary gap between SMIC and TSMC is not as large as the gross profit margin, many of SMIC’s factories are located in first-tier cities, and the high housing prices in first-tier cities are obvious to all. This makes the average salary of SMIC’s R&D personnel exceed 300,000, it is also difficult to bear the weight of high housing prices. This is probably the reason for the high turnover rate of Shanghai and Beijing factories, because Beijing and Shanghai are the first-tier cities with the highest housing prices in China.

In Zhihu, there are employees who are suspected of SMIC anonymously complaining that the company’s salary has been difficult to cope with the pressure of high housing prices in first-tier cities. It is necessary to know that the turnover rate of employees under 30 of SMIC reaches 79.3%. The 20s are just the age group for getting married and buying a house. When the salary cannot cover the house price, the only choice is to leave. The house price is lower, and there is “high salary + settlement.” Second and third-tier cities with a subsidy policy.

It can be seen that high housing prices have already shown a squeeze on the high-end manufacturing industry. Even the chip industry with higher salaries is feeling the huge pressure of high housing prices, not to mention the general manufacturing industry. Therefore, it is time to fully reflect and pay attention to the squeezing effect of high housing prices on the manufacturing industry.

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