Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Law to protect workers sends investors running to robots
A four-legged robot is showcased at a robotics exhibition at Coex in Seoul, June 29. Yonhap
By Lee Yeon-woo
The contentious passage of the "yellow envelope law" has triggered an unintended consequence by boosting expectations that robots will replace human labor at an even faster pace, industry officials said Tuesday.
The pro-labor revisions to the Trade Union and Labor Relations Adjustment Act that passed the National Assembly on Sunday aim to broaden protections for subcontracted and indirectly employed workers and strengthen their right to collective action.
While labor groups hailed the passage as a major victory, business circles warn that the law could undermine the competitiveness of industries reliant on complex supply chains and subcontracting, potentially inviting costly legal battles.
Investor sentiment appears to lean toward the concerns raised by business leaders. Many see automation as a more dependable alternative to expanding the workforce without legal risks, a shift that has driven up robotics stocks sharply this week.
According to the Korea Exchange, shares of Robotis, a robotics firm that produces a self-driving robot, surged to 103,300 won ($74), rising 2.58 percent Tuesday after gaining 19.31 percent on Monday.
Other local robotics companies like Yuil Robotics, Clobot and Nau Robotics jumped by 10.34 percent, 4.01 percent and 11.86 percent, respectively, on Tuesday, following gains of 7.93 percent, 7.87 percent and 7.68 percent on Monday.
"While domestic manufacturing sectors such as shipbuilding and automobiles are expected to take a hit (due to the yellow envelope law), robot stocks have rallied amid expectations of increased demand for robotic automation," said Yang Seung-yoon, an analyst at Eugene Investment & Securities.
"Robots don’t go on strike," one individual investor commented on an online community.
The government's push to become a global leader in "physical AI" is also fueling investor enthusiasm. The term refers to artificial intelligence (AI) embedded in robots or physical devices that can interact with the real world by moving and manipulating objects and responding to their surroundings.
In its economic growth strategy announced Friday, the government outlined plans to develop general purpose humanoid robots and position Korea among the world’s top three humanoid robot powers within five years.
Industry observers expect the passage of the yellow envelope law to accelerate the adoption of physical AI, with demand for robotics expanding beyond manufacturing into a broader range of industries.
A growing number of major firms are already integrating robotics and AI more deeply into their operations.
POSCO has deployed Boston Dynamics' four-legged robot Spot at high-risk worksites within its Gwangyang steel plant. HD Hyundai Samho began using robots in 2022 and now relies on 85 units to handle 70 percent of its welding operations. Hyundai Motor also plans to introduce Boston Dynamics' Atlas, a bipedal humanoid robot, at its vehicle assembly plant by the end of this year.
"Demand for robotics is rapidly expanding beyond traditional manufacturing sectors such as automotive and electronics, extending into the logistics, health care and service industries," Kiwoom Securities' global research team wrote in its recent report. "This broader adoption is driving productivity gains across the economy."