South Korean Labour Minister Urges Chip Giants to Share AI Windfall with Workers and Suppliers
A threatened mass strike by unionised workers at Samsung in South Korea has reignited a debate on labour welfare, rooted in a global memory chip shortage that pitted the chip division’s employees against management. Samsung, the world’s largest memory chip producer, has reaped enormous profits from the crisis triggered by the AI boom, with its market capitalisation surpassing US$1 trillion for the first time due to soaring demand. However, workers argued the company’s stellar business performance was not reflected in their welfare, demanding changes to salary and bonus schemes linked to company profits. After tough discussions, union and management reached a compromise and the strike was called off, though a new issue emerged among workers when the non-chip divisions claimed the bonus and salary scheme was uneven and only benefited chip division staff.
Beyond the dispute, a wider discussion has arisen on how companies should treat workers and the broader ecosystem, especially when business is booming. In an interview, Labour Minister Kim Young-hoon stated companies like Samsung, which have exceeded profit targets, should consider distributing excess profits after tax to suppliers, sub-contractors, and workers. Kim argued that many parties contribute to a company’s growth, and when a company ascends, the rest of the ecosystem should also taste the rewards. He insisted that the government, businesses, unions, and suppliers must all engage in public dialogue on channelling ‘excess profits’ and narrowing the gap between large conglomerates and small suppliers.
Kim, a former labour activist appointed by left-wing President Lee Jae Myung who helped mediate the last-minute deal between Samsung’s management and union, stated new rules for distribution must be established through social dialogue. He acknowledged that Samsung’s great success is the result of the dedication and effort of both the workforce and management, but noted there are also 1,700 suppliers and local communities involved, including in supplying water and electricity. Profits at Samsung and its rival SK Hynix have surged due to increasing AI usage fuelling demand for memory chips. Samsung has already agreed to grant special bonuses to employees if it achieves annual operating profits of more than 200 trillion won from 2026 to 2028.
Kim first floated the idea of public dialogue on what to do with excess corporate profits in late May and has since said he plans to hold a forum on the matter. He shared his ideas on what constitutes excess profits and how they could be shared, such as adjusting supplier prices, for the first time. However, Kim drew criticism from the conservative opposition People Power Party (PPP), which said he has put forward a dangerous idea of state intervention that undermines the foundations of the free market economy. The presidential office previously said Kim’s comments had raised important questions for the country and welcomed the idea of debate. A senior South Korean policymaker also last month suggested paying citizens a ‘dividend’ using excess tax revenues from AI profits. Samsung and SK Hynix declined to comment.