The uncomfortable questions behind the 'semiconductor festival'

The recent announcement of record-breaking first-quarter operating profits for Samsung Electronics, reaching an unprecedented 57 trillion won, has understandably created a celebratory atmosphere within the company and among its stakeholders. This financial triumph, a testament to the prowess of South Korea's 'semiconductor titans,' Samsung and SK Hynix, places Samsung in a league of its own, achieving a milestone no other domestic company has reached.

However, this 'festival' of success is not without its discordant notes. The immense profits have immediately ignited internal disputes. Labor unions are demanding a larger share in the form of performance bonuses, while shareholders are anticipating special dividends. This situation, where increased profits lead to intensified struggles over distribution, is a recurring theme in South Korea's corporate landscape. The widening gap between the haves and have-nots is particularly stark when considering the subcontractors, who, despite performing essential tasks, are often excluded from these profit-sharing discussions, leading to feelings of relative deprivation.

This issue of profit distribution is not new. Similar debates arose in 2018 when the semiconductor industry saw record export figures. Despite efforts by the previous administration to introduce policies like 'cooperative profit sharing,' industry resistance, rooted in concerns about accurately assessing subcontractor contributions and managing losses, ultimately stalled such initiatives. The current situation, with even greater profits and more vocal demands, underscores the persistent challenges in achieving equitable distribution within the industry's ecosystem.

The government, represented by the Minister of Trade, Industry and Energy, has rightly pointed out that Samsung's success is a collective achievement, involving not just management and labor but also the entire semiconductor ecosystem, including subcontractors and the local community. This perspective is crucial. While management's focus on reinvestment for future growth and labor's demand for fair compensation are valid, the exclusion of subcontractors from the 'festival' of profits is a critical issue that needs addressing. It is imperative that we move beyond rhetoric and establish clear rules for sharing these excess profits to foster a more inclusive and sustainable growth model for the entire semiconductor industry, especially as projections indicate a continued 'semiconductor supercycle' for years to come.

“

There is a need to consider whether Samsung Electronics' performance is the result of management and labor alone. As it is the result of the entire semiconductor ecosystem, including numerous infrastructures, subcontractors, and the local community, the distribution of excess profits is a matter that all members of the ecosystem must consider and make mature judgments.