Chipmakers face pressure to share ‘excess profits’ despite investment pledge

President Lee Jae Myung and presidential secretaries visit Kimdaejung Convention Center in Gwangju before announcing semiconductor plant investments by Samsung Electronics and SK hynix, Tuesday. Yonhap

Despite committing a combined 4,755 trillion won ($3.05 trillion) to semiconductor and artificial intelligence (AI) infrastructure investments in support of the government's balanced development agenda, Samsung Group and SK Group's chipmaking units are now expected to face fresh calls to share excess profits.

Politicians are already floating profit-sharing proposals, such as establishing a national wealth fund financed by additional tax revenue, distributing public dividends or returning a portion of excess profits to underdeveloped rural areas. The government plans to begin public discussions on the issue within a month, with the labor minister describing chipmakers’ "astronomical excess profits" as "the aggregate gains created by society."

In a Facebook post on Sunday, Kim Yong-beom, the presidential chief of staff for policy, said that how to distribute semiconductor companies’ “extraordinary profits between shareholders and workers” would be one of the key questions shaping the country's future.

He wrote that excess liquidity should be channeled into overseas investments and “a future response fund,” while the capital remaining in Korea should be used to foster new industries, allowing “excess liquidity to flow into more productive sectors.”

Kim did not elaborate on the future response fund, but similar proposals were raised by experts during a forum hosted by lawmakers from the ruling Democratic Party of Korea (DPK) and other liberal parties on June 25.

Basic Income Policy Institution President and former Basic Income Party Chairman Oh Jun-ho proposed placing 100 trillion won in additional annual tax revenue and other excess gains from the semiconductor industry into a national wealth fund and reinvesting the returns generated during its first 10 years.

He said the fund would be able to pay more than 600,000 won to every citizen after 30 years. He also called for a revision of existing laws or enacting new legislation to provide a legal basis for the proposal. Kim has also floated similar ideas in previous Facebook posts.

Other experts participating in the discussion proposed establishing an investment corporation or organizing a fund to return part of the semiconductor industry's profits to its workers.

Oh later wrote on Facebook that the discussion should “go beyond additional tax revenue” and consider the industry's overall profits as a windfall that should also be shared.

“The key point is that the semiconductor industry's profits include a common share created through the contributions of the country and its citizens,” he wrote. “The other panelists and I shared this understanding. There were also more proactive proposals for reclaiming that share, such as securing public equity stakes or raising corporate taxes on megacorporations.”

Labor Minister Kim Young-hoon reads a document during a government meeting on economy at Government Complex Seoul, June 4. Yonhap

In April, Rep. Mun Geum-ju from the DPK argued that semiconductor profits should be returned to rural communities, saying that the current chip boom was “built on the sacrifices that farmers and fishermen made during the country's free trade agreement negotiations (with the United States).” He urged the government to come up with tangible compensation measures, such as expanding the rural community coexistence fund.

As the debate expands to whether semiconductor companies' overall profits should be shared, concerns are growing among businesses.

"Calls to share not only additional tax revenue but also excess profits could undermine companies' incentives to invest and weaken their global competitiveness," an industry official said.

In an interview with Labor Today news outlet, Labor Minister Kim Young-hoon said the government "would be doomed to fail if it sets its own answers and treats dialogue merely as a means to that end," stressing that the process should begin with drafting a green paper and be followed by broad public discussions embracing diverse views.

Amid the growing debate, rumors spread on Wednesday that the government had sent letters to Samsung Electronics and SK hynix calling for the introduction of profit-sharing schemes and nullifying the wage agreements each company had reached with its labor union.

Both companies denied receiving any such letters, while the government also dismissed the claims as groundless and untrue.