South Korea Labor Minister Urges AI Chip Windfalls Be Shared With Suppliers

South Korea’s labor minister urged major domestic IT and semiconductor companies reaping huge profits from the artificial intelligence boom to share those gains with suppliers and workers.

In an interview with Reuters on June 4, Labor Minister Kim Young-hoon said companies such as Samsung Electronics Co. that exceeded profit targets should consider sharing excess after-tax profits not only with their own employees but also with suppliers and subcontractors across their supply chains. Their contributions helped lay the foundation for that growth.

Kim proposed a social dialogue framework involving the government, companies, labor unions and suppliers. “There is no denying that Samsung’s stellar performance was driven not only by the dedication of labor and management, but also by the contributions of about 1,700 partner companies and local communities that supplied water and electricity,” he said. “We need to establish new rules for distribution.”

The People Power Party sharply criticized the idea, calling it dangerous state intervention that would undermine the foundations of a free-market economy.

Kim rejected that criticism, saying the opposition’s claim that his proposal amounted to communism was untrue. Sharing profits with suppliers would be a reinvestment in the supply chain and an alternative for boosting the competitiveness of small and medium-size companies and overcoming South Korea’s low-growth trend, he said. Specific measures could include adjusting supply prices paid to partner firms or investing in talent development at smaller businesses, he added.