Kim Dong-ho
The author is an editorial writer at the JoongAng Ilbo.
A new buzzword has been circulating among office workers and students in Korea — “ha-ui-chi-han.” It is a portmanteau combining the first syllables in Korean of preferred career paths, in order: (SK) hynix, medical school, dental school and Korean medicine school. This suggests that jobs at SK hynix now rank above traditional elite professions such as medicine, dentistry and Korean medicine, which used to occupy the first three syllables of the phrase.
The change in phrase reflects a striking shift in the labor market, as soaring bonuses at semiconductor firms are drawing top talent and raising hopes that Korea could become a nation of engineers, much like China.
Yet public reaction to this wave of bonuses is mixed. There are growing concerns that aggressive demands for performance-based pay at large firms could trigger broader social side effects and weaken companies’ capacity for long-term investment.
Members of Samsung Electronics’ joint labor union action committee chant slogans during a rally titled “Make it transparent and achieve the removal of the cap” held in front of the company’s Pyeongtaek campus in Gyeonggi on April 23. [YONHAP]
The current turmoil stems from a sudden surge in extraordinary profits. While Korean companies have moved from seniority-based pay systems to annual salary structures, they have had little opportunity to establish rational models for distributing performance-based rewards to key talent. SK hynix’s decision to guarantee up to 10 percent of operating profit as bonuses over a decade appears to have been a reluctant concession to persistent union demands. The labor union at Samsung Electronics has also escalated its demands, calling for 15 percent of operating profit as excess profit incentives and warning of production disruptions that could cost the company trillions of won if unmet.
When performance is strong, rewards are justified. But employees in semiconductor firms need to take a step back. Rapidly rising bonus demands risk creating serious distortions not only within the industry but across society.
The first issue is the legitimacy of compensation. The profits being generated today are not solely the result of current employees’ efforts. They reflect the entrepreneurial risks taken by founders, decades of research and development by earlier generations of engineers and the patience of shareholders who supported large-scale investment while forgoing dividends.
Local communities have also borne costs, including inconvenience from the infrastructure needed to supply electricity and water. Tax credits that supported investment were ultimately funded by the public. Meanwhile, consumers are already paying higher prices for smartphones and laptops as semiconductor prices rise. Against this backdrop, demands for excessive bonuses simply because employees are currently in position risk being seen as self-serving.
The form of compensation also raises concerns. Large, one-off cash payouts diverge from global norms. Companies such as Google and Nvidia rely heavily on restricted stock units rather than cash. These instruments align employees’ incentives with long-term corporate value rather than short-term gains.
A deeper concern is the widening dual structure of the labor market. With wages at large firms already more than double those at small- and medium-sized enterprises, massive bonuses in the semiconductor sector could further widen the gap with suppliers. Without these partner firms, semiconductor production would not be possible. A mindset that treats contractual payments as sufficient risks undermining the broader industrial ecosystem. Without shared growth, such disparities could ultimately weaken the entire sector.
Korea has already seen a cautionary example. After SK Biopharmaceuticals went public in 2020 following decades of investment, its share price surged and employees exercised stock options, leading many to leave the company. The resulting talent shortage forced the company to encourage former employees to return, leaving those who remained and shareholders to bear the consequences.
The headquarters of SK hynix in Icheon, Gyeonggi, is seen on April 23, when the company extended its record-breaking performance streak, posting more than 52 trillion won ($35.1 billion) in revenue and 37 trillion won in operating profit on surging demand for AI chips. [YONHAP]
The semiconductor industry is inherently cyclic. Although the AI boom has provided momentum, there is no guarantee that Korea’s competitive edge will endure as the United States, China, Japan and Taiwan intensify their own efforts to localize semiconductor production. If union demands are met in full, total bonuses could exceed 40 trillion won ($27 billion), far surpassing shareholder dividends of around 11 trillion won. Such an imbalance could provoke legal challenges from investors.
Focusing excessively on immediate cash rewards risks eroding the industry’s long-term foundations. Public resistance has already complicated policy support measures such as exemptions to the 52-hour workweek and government subsidies, as large firms are increasingly seen as distributing windfall gains.
What the semiconductor sector now requires is not complacency but discipline. Sustaining a technological edge will depend on a balanced approach that recognizes where profits originate, how they should be shared and how much must be reinvested for the future. Only such restraint can secure the long-term competitiveness of Korea’s semiconductor industry.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
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