[fn Plaza] 'Distribution at All Costs' Has No Future

Tensions are rising as management and labor at Samsung Electronics clash over how to distribute performance bonuses, while Cheong Wa Dae policy chief Kim Yong-beom sparked controversy on the 12th by proposing a "national dividend" system. The Samsung Electronics labor union's demand for about 45 trillion won in performance bonuses this year alone was shocking to ordinary people. The ensuing national dividend policy also rattled the stock market. Even though Cheong Wa Dae drew a line by calling it a "personal view" and framed it as a use of excess tax revenue, the core logic was the social sharing of corporate profits. It also had a strongly radical feel. It was the kind of idea that, if not communicated precisely, could lead the market to misread the policy direction. Some analysts said the KOSPI Composite Index briefly fell by about 5% after Kim's remarks became known.
The dispute over Samsung Electronics' bonuses and the proposal for a national dividend policy both place distribution at the center. After Samsung Electronics announced first-quarter operating profit of 57.2 trillion won, the labor union demanded bonuses equal to 15% of operating profit and the abolition of the bonus cap. If extended to a full year, Samsung Electronics' operating profit is expected to exceed 300 trillion won this year alone. Applying the 15% rule would raise that figure to as much as 45 trillion won. When the pantry is full, calls for distribution naturally grow louder.
The national dividend policy is a social extension of corporate profit distribution. Kim mentioned the idea as a way to return excess tax revenue generated by record corporate profits in the age of artificial intelligence to the public. While discussing the national dividend policy, he used the word semiconductor eight times. He may have had Samsung Electronics and SK hynix in mind, both of which posted record results.
The current success of the semiconductor industry is the result of a long-accumulated industrial infrastructure, education system, and government policy. Distribution is, of course, necessary. Without government fiscal and tax support, as well as public backing, Samsung Electronics and SK hynix would look very different today. When factories were expanded, tax benefits were provided through the K-Chips Act, and despite criticism of favoritism, the logic of securing a global lead was prioritized. There are countless examples of financial and infrastructure support for semiconductor companies, including the National High-Tech Strategic Industry Act and the Semiconductor Special Act.
What deserves attention here, however, is the future. If we focus only on the present, the future will be destroyed. That applies not only to companies, but also to households and the government. Suppose Samsung Electronics were to distribute about 45 trillion won this year to individual union members and repeat that every year. Semiconductor companies must invest huge amounts of capital even when they are in the red if they want a chance to compete globally. Expanding just one production line costs 50 trillion won. The fate of such companies is to live in the present while constantly thinking about the future. The same is true of research and development, which is central to corporate competitiveness. Last year, 11 trillion won was paid out to shareholders as dividends. R&D spending was about 38 trillion won. In the semiconductor sector, fast, concentrated, and large-scale investment determines success or failure. How can competitiveness be maintained if cash bonuses continue to be paid out at levels far above R&D spending? Minister of Trade, Industry and Energy Kim Jung-kwan's intuition on the Samsung Electronics labor dispute is reasonable. He said, "At this stage, it is essential to strike a balance between how much profit to enjoy now and how much to leave for future generations and future competitiveness."
The Samsung Electronics labor union's excessive bonus demand also offers lessons for the government. Kim Yong-beom's decision to raise the issue of social debate over profit sharing in the AI industry is, in one sense, appropriate. Even so, when using this year's excess tax revenue, the question of how to allocate the budget for future preparedness remains. The foundations of the market economy must not be undermined. In the market, Samsung Electronics and SK hynix are expected to post combined operating profit in the 500 trillion won range this year. If that happens, corporate taxes alone would exceed 100 trillion won. That would allow the government to meet its original corporate tax revenue target of 86 trillion won for the year using only the taxes from those two companies. Next year's operating profit forecast is in the 700 trillion won range. Tax revenue in 2026 and 2027 is likely to reach historic levels. In addition, if income taxes from highly paid semiconductor workers are included, record tax revenue could accumulate. A significant portion of the surge in tax revenue should be allocated to repaying national debt in preparation for the future. It would be a kind of government-led future investment. Only then will criticism of Samsung's labor union by government officials carry greater weight.
Semiconductors are a blessing. But companies are not cash machines for taking money out. If everyone focuses only on the present and neglects investment, no one can guarantee a rosy future. Boom times always pass. There is concern that if Korea simply looks for ways to share semiconductor profits, it may be overtaken by rival countries. A sustainable performance-sharing system must be created without undermining future competitiveness. That is an urgent task for both companies and the government.
mirror@fnnews.com Reporter