Learning from Korea: Companies Reap Big Profits, Workers Must Share the Wealth

Jakarta, CNBC Indonesia - When workers unite, conglomerate giants are powerless. This was evident in South Korea.

Samsung workers’ threat of an 18-day mass strike ultimately forced management to concede, agreeing on a win-win solution.

Workers demanded fair and transparent pay and bonus schemes as Samsung’s chip division recorded stellar performance. Soaring demand for advanced AI chips triggered a global memory chip shortage, driving prices to unprecedented levels.

Consequently, a global memory chip shortage led to sky-high price increases. Samsung’s market capitalisation reached $1 trillion due to high demand for memory chips.

However, this positive performance did not translate into improved worker welfare. Unions demanded Samsung remove the 50% annual salary cap on bonuses and allocate 15% of annual operating profits to bonuses, seeking formalisation of these changes over a year.

Negotiations with Samsung were protracted, but a last-minute agreement was reached, postponing the planned mass strike set for 21 May 2026.

Under the new agreement, Samsung is expected to allocate around 10.5% of its operating profits to special bonuses for the chip division, including memory and logic chip businesses, according to the unions.

However, the deal faces new challenges. Non-chip divisions argue that the hefty bonuses only apply to certain employees in the chip division under various conditions.

Meanwhile, smartphone and home appliance divisions do not receive similar benefits.

Companies Reap Big Profits, Workers Must Share the Wealth

Amid ongoing disputes, South Korea’s government emphasises that AI-generated wealth must benefit society broadly, including improving worker welfare.

This was stated by Deputy Prime Minister Bae Kyung-hoon, who noted that the AI era raises broader questions about distributing technological wealth, whether AI exacerbates inequality, and if it leads to job losses.

“Recent management-worker conflicts are part of a broader trend,” he added, referring to Samsung’s strike threat.

According to Bae, such worker actions are unlikely to be one-off.

“In the AI era, many tech giants will continue to grow. In this process, management-worker conflicts will persist. It is crucial to resolve conflicts wisely through dialogue,” Bae said.

He cited Hyundai, noting concerns about integrating Boston Dynamics’ Atlas robot into the automaker’s manufacturing processes.

Bae stressed that South Korea must not only create wealth through AI but also ensure its proper use and societal impact.

“AI benefits must also be felt by the public,” Bae said.

He said Seoul is focused on building an inclusive AI society, ensuring no one is left behind in the AI era.

Market Worries Over Korean Official’s Comments

This followed a 12 May Facebook post by presidential aide Kim Yeong Beom proposing to distribute excess tax revenue from South Korea’s AI and semiconductor sectors to the public, which triggered market volatility.

A subsequent official clarified that Kim’s post reflected his personal views, not formal government discussion.

Bae, who also serves as South Korea’s science and technology minister, was asked about the sharp market rise led by major firms like Samsung and SK Hynix due to the AI boom.

Samsung’s year-to-date gains have nearly doubled at 144%, while SK Hynix has risen almost 200% since January. The Kospi index is up 86% year-to-date in 2026, surpassing last year’s 75% rise.

When asked if tech sector profit concentration was a weakness, Bae replied: “While these companies have their strengths, there is also an ecosystem of related firms supporting semiconductor production.”

South Korea is also striving to build competitive advantages in physical AI, Bae said, expressing confidence that Seoul can break into the sector.

Physical AI typically refers to AI embedded in machines such as robots, vehicles, and industrial systems, enabling them to sense, reason, and act in the real world.

“In a sense, semiconductors and AI infrastructure provide the fundamental foundation. Beyond that, Korea is attempting to build a full spectrum of AI capabilities, including various hardware, software, and related services,” he explained.