Seoul: Of the many issues facing Korea's semiconductor sector, how to address the "excess profits" from the semiconductor super cycle has become a focal point of discussion. The business sector has been grappling with labor-management disputes over bonus allocations, highlighted by the bonuses awarded to workers at SK hynix.
According to Yonhap News Agency, Chey Tae-won, chairman of SK Group and the Korea Chamber of Commerce and Industry, shared his views on profit-sharing amid significant earnings. This marked the first occasion where the leader of SK Group discussed SK hynix's additional bonus payment linked to its operating profit agreement made last year. Responding to SK hynix's actions, unionized workers at competitor Samsung Electronics successfully negotiated a 12 percent bonus increase in May, prompting similar demands in other industries.
At the Jeju Forum on July 15, Chey emphasized the importance of balancing employee satisfaction with stakeholder interests. He noted, "It would be a problem if everyone were unhappy with it. But I do not see the issue that way. I want to keep our employees as happy as possible, but we must also share that happiness with our stakeholders. If employee happiness comes at the expense of stakeholders, that benefit will no longer be sustainable." His reference to stakeholders encompassed shareholders, executives, employees, supplier companies, customers, and local communities. Distributing the significant profits garnered by SK hynix and Samsung Electronics could motivate workers and strengthen labor-management trust but has started to create divisions in other sectors, particularly in automotive and information technology companies.
Chey suggested that companies should reconsider how CEO and executive salaries are subject to shareholder approval, while substantial bonus payments are not. This calls for addressing the disparity between the two.
Globally, the semiconductor industry is at a crossroads, with opinions divided on whether the artificial intelligence (AI) boom will decelerate or continue to be profitable in the long term. Companies must brace for potential scenarios: price drops due to mass production or sustained demand elevating chip prices.
The semiconductor sector is vital to Korea's economy, contributing increasingly to the nation's growing exports. Korea's per capita GDP is projected to be $39,164 this year, according to the finance ministry, the Bank of Korea (BOK), and the National Data Agency. The BOK governor mentioned that rising semiconductor prices influenced the decision to raise the interest rate to 2.75 percent.
Chey's remarks on distributing windfall gains warrant serious attention. The labor sector remains firm on fair profit-sharing. Meanwhile, government agencies are divided. The trade ministry emphasizes reinvesting excess profits back into the industry, aligning with the government's focus on launching three megaprojects to enhance Korea's AI leadership by developing semiconductor clusters in the southwestern region around Gwangju. Conversely, the labor ministry advocates for fair profit distribution, viewing it as a more "definitive reinvestment" in society.
These discussions will be constructive in the long term, requiring both debate and consensus. Korea must adopt realistic methods for investing in the country's future, with one consideration being the relaxation of the 52-hour workweek limit in critical sectors.