South Korea's labour minister, Kim Young-hoon, has called on the country's leading technology firms to consider redistributing portions of their unusually large profits that have emerged amid a surge in demand for memory chips tied to artificial intelligence. Kim said companies that exceed profit expectations should think about sharing surplus earnings with suppliers, subcontractors and their own workers once taxes are paid, in recognition of those parties' contributions to corporate success.
In an interview, Kim framed his suggestion as the beginning of a public discussion rather than a fixed policy prescription. He said the government, businesses, unions and supplier networks should engage in an open debate about how to divide what he described as "excess profits" so as to reduce the gap between South Korea's large conglomerates and smaller suppliers.
Kim noted that the remarkable performance of firms such as Samsung Electronics stemmed from collaborative efforts across labour and management. "It is undeniable that Samsung’s remarkable achievements are the result of the dedicated efforts of labour and management," he said. He added that the firm's success has depended on a network of about 1,700 suppliers and contributions from local communities, including utility services like water and electricity.
Profits at Samsung and its peer SK Hynix have soared as AI-related demand has driven up the need for memory chips. Samsung has announced it will grant special bonuses to employees if the company reaches annual operating profit of more than 200 trillion won from 2026 through 2028. Kim said he first raised the prospect of a public conversation about the disposition of excess corporate profits in late May and intends to convene a forum to explore the matter further.
As part of the discussion, Kim outlined specific mechanisms that could be considered for sharing windfall gains. He suggested adjusting contract prices paid to suppliers and investing these resources in talent development at small suppliers, while emphasizing that such measures would amount to reinvestment rather than the imposition of a political doctrine. "What I mean by distribution is sharing profits with suppliers," he said. "This is clearly reinvestment." He argued that reinvesting in the supply chain would strengthen competitiveness and help address the country’s low-growth challenges.
Kim also rejected criticism from the conservative opposition, the People Power Party, which labelled his proposal a "dangerous idea of state intervention that undermines the foundation of the free-market economy" and accused him of promoting "communism." In response, Kim said his intent was to bolster supply-chain capabilities and workforce development rather than to nationalize profits or impose ideological controls.
The presidential office did not respond to a request for comment on the interview. Previously, it had characterized Kim’s remarks as raising important questions for the country and expressed support for having a debate on the topic. Separately, a high-ranking policymaker in South Korea recently proposed using excess tax revenue generated by AI-driven profits to pay a citizen "dividend," an idea Kim’s comments sit alongside in the ongoing conversation about how to allocate gains from the AI boom.
Both Samsung and SK Hynix declined to comment on Kim’s proposals. The minister noted that specifics of any program would be for public discussion and that potential approaches could include adjustments to supplier contract pricing, targeted investment in small suppliers’ talent pools, or other mechanisms that acknowledge the role these smaller companies play in the broader value chain.
Kim’s remarks come after he played an active role in averting a major strike at Samsung by helping to broker a last-minute pay deal between the company and its union. The negotiations had repeatedly stalled and threatened an 18-day-long strike that officials warned could have inflicted damage on the national economy and equity markets. The settlement delivered substantial bonuses to Samsung’s memory-chip workers and averted extended industrial action.
It is uncommon for a South Korean labour minister to take a hands-on role in company-union talks, but Kim said he intervened at the request of both Samsung’s management and its union. He attributed the difficulty of the talks in part to the company’s limited experience with unionized labour, given Samsung's long-standing no-union stance, and to the unprecedented nature of the profits being discussed, which made internal allocation of gains among different stakeholders a complex issue.
Analysts have suggested the Samsung deal could encourage unions at other firms to press for improved compensation. While Kim said he does not intend to manage every labour negotiation personally, he argued that establishing a framework to assist company-union discussions on profit-sharing would be useful going forward, helping smooth bargaining and reduce the need for ministerial intervention.
Kim warned of the broader social consequences if the income gap were to widen as a result of concentrated gains at large firms. He said job applicants in South Korea prefer employment at conglomerates like Samsung because of differences in pay, benefits and other conditions - a divide that could expand if workers at big companies receive large performance-driven bonuses while employees at smaller suppliers do not. "This is worrisome," he said.
Government data show that the income gap between the bottom 20% and the top 20% of households widened by the most in six years in the first quarter, according to Kim’s comments. He argued that worsening inequality would act as a drag on growth in Asia’s fourth-largest economy.
Kim also pointed to internal tensions within Samsung, noting management must deal with discontent over pay disparities between the memory-chip division and non-memory areas of the business. He warned that this could lead to defections among some foundry workers if not addressed. "Of course, there must be rewards for short-term performance," he said, "However, the company also needs to invest in and motivate strategic talent over the mid-to-long term."
The minister’s comments lay out some of the unconventional approaches under consideration by South Korean policymakers as they contend with a significant national windfall tied to AI-driven global demand for semiconductors. Kim said the distribution discussion would begin with a public forum and social dialogue aimed at establishing new rules for sharing the gains generated by the sector.
($1 = 1,529.7800 won)