Chipmaking equipment maker Tokyo Electron will raise starting monthly salaries for new employees by about 40 percent in a bid to secure talent by bringing its compensation in line with that of its foreign counterparts.
Starting salaries have increased significantly
Focusing on the details and background of Tokyo Electron's new employees' salary increase
Tokyo Electron, a chipmaking equipment maker, will raise starting monthly salaries for new employees by about 40% to secure talent by bringing its pay in line with that of its foreign counterparts.
The company will increase the salaries of all new employees by 85,500 yen. University graduates who join the company in April 2024 will receive 304,800 yen ($2,161) per month, while those with higher degrees will receive 320,000 yen, both above the 300,000 yen mark. This is the first time Tokyo Electron has raised salaries for new employees in seven years.
Intensified competition for talent
Covers chip industry investment, recruitment plans and salary comparisons with foreign companies
Japan has seen a series of major chip-related investments, including TSMC's entry into the southwestern main island of Kyushu. Chipmakers are offering high salaries to hire skilled workers, a trend that is also affecting equipment makers.
Tokyo Electron plans to recruit about 400 new graduates in the spring, 50 more than that year, and increase the number of new employees to 500 within a few years.
According to a survey by the National Personnel Bureau in spring 2023, the average starting salary for university graduates in Japan's private sector is about 210,000 yen, and 230,000 yen for those with higher education.
A source at Tokyo Electron said: "To obtain talent, we aim to raise the salary level of foreign competitors."
Although Tokyo Electron believes its annual revenue, including summer and winter bonuses, is comparable to or higher than that of overseas competitors, the company is concerned that job listings (listing only starting salaries) may make its job offers look less attractive.
Many foreign equipment and semiconductor manufacturers doing business in Japan offer starting salaries of more than 300,000 yen for those with a bachelor's degree.
Applied Materials offers a starting salary of 370,000 yen for Japanese fresh university graduates. Starting salaries at Lam Research are around 300,000 yen, while those at Micron Technology, which has a plant in Hiroshima Prefecture, are around 310,000 yen.
Chip industry expansion
Japan's chip manufacturing industry development, subsidy policy and Tokyo Electron salary growth history
Japan is offering subsidies to kick-start its chip manufacturing industry. TSMC plans to start production at a new plant in Kumamoto in late 2024, while government-backed chipmaker Rapidus seeks to build a plant in Hokkaido in 2025. Competition for talent is intensifying as investment in research and production increases.
Tokyo Electron has been raising annual salaries, including bonuses, due to strong business performance. Financial statements show that the average annual salary as of March 2023 is 13.98 million yen, an increase of 3.22 million yen from March 2018.
