Shinhan Securities Raises Hanall Biopharma Target Price by 171% Amid Promising Drug Developments Shinhan Investment Corp. announced on May 29 that it has raised its target price for Hanall Biopharma from 48,000 won to 130,000 won, a 171% increase, citing the company's progress in developing a treatment for refractory rheumatoid arthritis (D2T RA) and expectations for substantial royalty revenues. The firm maintained its "buy" rating on the stock. Analyst Eom Min-yong noted, "This is the first time globally that the FcRn mechanism has shown potential for success in D2T RA," adding that it is a pivotal moment to focus on anticipated royalty income and the potential for expanding indications. Shinhan Investment Corp. also assessed that Hanall Biopharma's partner, Immunovant, has secured superior efficacy with its drug IMVT-1402 compared to competing global treatments. Notably, Johnson & Johnson has withdrawn its drug nipocalimab from D2T RA clinical trials, and Azenex's Vivgart has also failed to demonstrate efficacy in this indication, positioning IMVT-1402 as a likely frontrunner and leading treatment option. IMVT-1402 has been evaluated to show a relative improvement effect of 2 to 3 times compared to nipocalimab on key rheumatoid arthritis indicators such as ACR20, ACR50, and ACR70. Despite Azenex's setbacks in some clinical trials for expanding indications, Shinhan Investment Corp. expects the company to generate $4.2 billion in revenue this year solely from myasthenia gravis (MG) and chronic inflammatory demyelinating polyneuropathy (CIDP). In contrast, IMVT-1402 is anticipated to gain an advantage over competing drugs across various indications, including thyroid eye disease (TED), membranous nephropathy (MN), pemphigus, and immune thrombocytopenia (ITP). Shinhan Investment Corp. highlighted the potential for IMVT-1402 to become the first and only approved treatment for Graves' disease (GD), D2T RA, and cutaneous lupus erythematosus (CLE). The firm estimates that even without revenue from D2T RA, sales from other indications could exceed $5.1 billion by 2032. Applying a mid-teens royalty rate, Hanall Biopharma could potentially receive annual royalties of around 1 trillion won. Additionally, there are expectations for intensified merger and acquisition discussions involving Immunovant by major global pharmaceutical companies. Eom emphasized, "It is the only treatment capable of achieving an 80% reduction in immunoglobulin G (IgG) levels through the FcRn mechanism, making it difficult for latecomers to achieve additional efficacy improvements." He added, "According to U.S. CMS guidelines, price protection can be maintained for 13 years, and patents are protected until 2043. The final clinical results for D2T RA scheduled for the second half of this year will be a key momentum."* This article has been translated by AI. 2026-05-29 08:50:00

Market Preview: Easing War Risks and AI Strength—Will KOSPI Rally Again? U.S. stock markets continue to reach record highs, buoyed by easing geopolitical risks in the Middle East and a surge in artificial intelligence (AI) stocks, raising questions about the sustainability of the domestic market's upward trend. However, with the KOSPI already at historic highs, there are concerns about potential profit-taking in the short term. On May 28, the S&P 500 and Nasdaq Composite indices rose by 0.58% and 0.91%, respectively, setting new all-time highs. The Dow Jones Industrial Average also gained 0.05%, closing slightly higher. The market rally was driven by optimism surrounding the easing of tensions in the Middle East. Reports indicated that the U.S. and Iran are finalizing a memorandum of understanding (MOU) to end hostilities, pending final approval from President Donald Trump, which improved investor sentiment. AI stocks also showed strong performance. Snowflake, a cloud data company, saw its shares soar by 36.48% after raising its annual revenue forecast and securing a long-term contract with Amazon Web Services (AWS). This led to gains in major semiconductor stocks, including Nvidia (up 0.78%) and AMD (up 4.55%), while the Philadelphia Semiconductor Index rose by 1%. The domestic market is expected to open higher, following the positive momentum from U.S. tech stocks, particularly in the semiconductor sector. Notably, after the U.S. market closed, Dell Technologies reported earnings that exceeded market expectations, causing its stock to surge over 38% in after-hours trading, which is likely to positively influence investor sentiment in the domestic semiconductor industry. As of 8:03 a.m. on May 29, shares of Samsung Electronics were trading at 307,000 won, up 2.5% from the previous day, while SK Hynix rose 3.41% to 2,367,000 won. Additionally, SK Square increased by 3.07%, and Samsung Electro-Mechanics gained 6%, indicating a broad buying trend across semiconductor and AI-related stocks. Han Ji-young, a researcher at Kiwoom Securities, stated, "Today, the domestic market is expected to rebound due to renewed expectations surrounding U.S.-Iran negotiations, the strong performance of KOSPI 200 futures, and the impact of Dell's after-hours stock surge, which will bolster recovery in sectors that experienced significant declines yesterday. However, the recent rapid rise of the KOSPI to historic highs raises concerns about a potential slowdown in upward momentum. Market participants will closely monitor foreign investor activity and profit-taking as key factors influencing the market's direction in the coming days." 2026-05-29 08:34:00

Samsung Electronics Faces Controversy Over Employee Turnover Rates Some analyses suggest that Samsung Electronics has a significantly higher employee turnover rate than SK Hynix, prompting debate within the semiconductor industry over differing comparison standards. Samsung's figures include global personnel from overseas production subsidiaries, while SK Hynix's data focuses primarily on domestic employees, raising concerns about the validity of direct comparisons. According to industry sources, the five-year average turnover rate from 2020 to 2024, based on sustainability reports, indicates that Samsung's rate stands at 2.1%, lower than SK Hynix's 2.3%. Notably, when examining only the semiconductor sector, Samsung's Device Solutions (DS) division reportedly has a turnover rate in the 1% range, widening the gap with SK Hynix. Recent surveys have suggested that Samsung's turnover rate for 2024 could be in the double digits, while SK Hynix's is projected to remain in the single digits. However, industry experts argue that these figures are not directly comparable, as Samsung's data encompasses all employees globally, while SK Hynix's figures are limited to domestic staff. When focusing solely on semiconductor employees, Samsung's DS division is said to have a turnover rate in the 1% range, further increasing the disparity with SK Hynix. Samsung operates large production facilities in countries like Vietnam and India, where local labor market conditions lead to higher turnover rates among production staff, thus inflating the global turnover rate. In contrast, to assess job stability in domestic semiconductor research and production roles, comparisons should be made within the same scope and job categories, experts suggest. Internally, Samsung has indicated that the demand for personnel in High Bandwidth Memory (HBM) and advanced packaging has increased, and the actual turnover of key staff in the DS division is being managed at a rate lower than the overall global turnover. Industry observers view this controversy as indicative of the competitive sensitivity surrounding talent acquisition in the semiconductor sector. As competition intensifies in HBM and advanced foundry processes, employee retention is closely tied to corporate competitiveness. In response, Samsung stated, "Samsung's figures include all domestic and international employees, while Hynix calculates only domestic staff, leading to apparent discrepancies. Given Samsung's extensive production lines in Vietnam and India, the frequent turnover among overseas production staff contributes to a higher global turnover rate." 2026-05-29 08:34:00

Impact of Middle East War Intensifies as Production, Consumption, and Investment Decline in April Last month, South Korea experienced simultaneous declines in production, consumption, and investment. This marks the first time all three indicators have decreased since August of last year. The impact of the ongoing Middle East war, which began at the end of February, appears to be significantly affecting the economy. According to the National Data Agency's report on April 2025 industrial activity trends released on the 29th, the index for total industrial production (seasonally adjusted, excluding agriculture and fisheries) fell to 117.8 (2020=100), a decrease of 0.6% from the previous month. This is the first decline in total industrial production since January, when it dropped by 0.8%. The decrease in production is largely attributed to declines in the service, mining, and construction sectors. While semiconductor production increased by 3.1%, mining production overall fell by 0.7%, driven down by significant drops in automotive production (-10.0%) and petroleum refining (-19.4%). Automotive production saw its largest decline since September of last year, when it fell by 15.3%. A representative from the data agency noted, "The decline in March was influenced by supply chain disruptions caused by fires at some parts manufacturers. However, we should also consider the pent-up demand due to new model launches starting in May." Petroleum refining experienced its steepest drop since May 1988, when it fell by 22.1%. Analysts interpret this as a result of supply difficulties caused by the blockade of the Strait of Hormuz due to the Middle East war, compounded by scheduled maintenance at some refineries. In the service sector, while production in information and communication increased by 4.3%, declines in finance and insurance (-7.7%) and retail (-1.5%) led to an overall decrease of 1.0% from the previous month. This is the largest drop since February 2022, when it fell by 1.7%. Domestic indicators also showed weakness. The retail sales index decreased by 3.6% compared to the previous month, marking the largest decline since February 2024, when it fell by 3.7%. While semi-durable goods remained stable, sales of durable goods, including communication devices, computers, and automobiles (-11.1%), as well as non-durable goods like vehicle fuel (-1.1%), significantly contributed to the decline. The representative added, "The sales of communication devices and computers may have been affected by a base effect from last month's 40.0% increase, while the drop in automobile sales is related to the surge in electric vehicle shipments earlier this year due to government subsidies." Investment also faced a downturn, with facility investment decreasing by 3.6% from the previous month. Although investment in machinery for semiconductor manufacturing rose by 0.5%, investment in transportation equipment, including other transport vehicles, fell by 11.5%. The data agency identified a significant reduction in aircraft imports as a key factor. Construction output declined by 1.4% compared to March, with both building (-1.5%) and civil engineering (-1.1%) projects seeing reduced activity. The coincident composite index, which reflects the current economic situation, rose by 0.2 points to 100.2, remaining above the baseline of 100 for the second consecutive month. The leading composite index, which forecasts future economic conditions, increased by 0.6 points to 104.1.* This article has been translated by AI. 2026-05-29 08:24:00

Bitcoin Prices Fall to $73,000 Amid U.S. ETF Fund Outflows Amid ongoing uncertainty regarding the timing of interest rate cuts in the United States, outflows from spot exchange-traded funds (ETFs) have contributed to a decline in the prices of major cryptocurrencies, including Bitcoin. According to CoinMarketCap, as of 8 a.m. on May 29, Bitcoin was trading at $73,357, down 1.26% from the previous day. Ethereum also saw a decrease, with its price falling 1.01% to $2,003. Binance Coin (BNB) and Solana dropped 1.62% and 0.83%, respectively, trading at $638 and $81. Ripple (XRP) recorded a slight increase of 0.08%, reaching $1.31. Market analysts suggest that the ongoing outflows from U.S. Bitcoin spot ETFs are increasing price volatility. Additionally, concerns about the prolonged tightening stance of the Federal Reserve and rising global tariff risks are seen as factors weakening investor appetite for riskier assets. Recent developments in the Middle East, coupled with pressures from ETF fund outflows, have contributed to a decline in overall investment sentiment in the cryptocurrency market. As of 8 a.m. on the same day, Bitcoin was trading at approximately 10,855,000 won ($73,544) on the domestic exchange Bithumb, reflecting a 0.66% increase from the previous day. The 'Kimchi Premium' stood at -1.226%, indicating that the price of Bitcoin in South Korea is lower than that in international markets.* This article has been translated by AI. 2026-05-29 08:24:00

Dev Sisters Promotes 'K-Heritage' at UNESCO World Heritage Committee Dev Sisters announced on May 29 that it will collaborate with the Cultural Heritage Administration to promote Korea's UNESCO-listed world heritage sites in conjunction with the 48th UNESCO World Heritage Committee meeting, which will be held in Busan in July. This campaign is part of a memorandum of understanding signed between Dev Sisters and the Cultural Heritage Administration in February. The initiative aims to reinterpret the unique values of Korea's cultural heritage through the lens of Cookie Run, showcasing the diverse attractions and significance of the 'K-Heritage Theme Park' concept, featuring Cookie characters. Cookie Run will be visible in both online and offline formats around Busan and other major cities in Korea before and during the UNESCO World Heritage Committee meeting. The campaign will kick off with large media walls set up in Seoul and Busan in early June. From July 20 to 29, during the main sessions of the World Heritage Committee, 17 posters of Korean world heritage sites reimagined with Cookie Run illustrations and one themed park concept piece will be displayed at the Korea Pavilion within BEXCO in Busan. Additionally, from July 18 to 26, a Cookie Run K-Heritage photo zone and pop-up store will be set up at Haeundae Beach in Busan. This area will feature some of the posters combining Korea's world heritage and Cookie Run. A 7-meter tall inflatable 'Brave Cookie' sculpture will also be installed on the beach. The campaign will include the 'Brave Cookie Tour in Busan,' linked with the Busan City Tour Bus, covering major attractions, the BEXCO exhibition, and the Haeundae photo zone and pop-up store. In July, Dev Sisters plans to conduct in-game promotions for 'Cookie Run: Kingdom,' 'Cookie Run: OvenBreak,' and 'Cookie Run Classic.' The World Heritage Committee is an international meeting that discusses the listing and preservation of world heritage sites. This year's UNESCO World Heritage Committee marks a significant cultural diplomacy event as Korea hosts the meeting for the first time in 38 years since its membership. Dev Sisters began promoting natural heritage in 2023 and previously co-hosted a special exhibition titled 'Cookie Run: In Search of Lost National Heritage' with the Cultural Heritage Administration in December.* This article has been translated by AI. 2026-05-29 08:22:00

Samsung Electronics Launches HBM4E Memory for AI Accelerators Samsung Electronics has begun supplying samples of its next-generation AI accelerator memory, the HBM4E 12-layer, to global customers. Following the mass production of HBM4, the early shipment of HBM4E samples marks a strategic move to regain leadership in AI memory that had shifted during the HBM3E era. As of May 29, industry sources report that Samsung is the first in the world to start shipping HBM4E 12-layer samples. HBM4E, a successor to HBM4, is a critical memory component that influences the computational performance and power efficiency of AI semiconductors. With the rapid growth in demand for high-performance HBM driven by the expansion of large language models and inference-based AI services, competition among customers to secure supply is intensifying. The new product incorporates 1c DRAM and 4-nanometer logic dies, allowing Samsung to achieve both process stability and mass production capabilities. The operating speed per pin is 14 Gbps, with a maximum potential of 16 Gbps. The bandwidth for a single stack reaches 3.6 TB per second. The capacity for the 12-layer version is 48 GB. Samsung plans to expand its lineup to include 32 GB 8-layer and 64 GB 16-layer products to meet customer demand. As AI accelerator companies increase model sizes and computational loads, HBM is emerging as a critical technology that influences overall system performance rather than just a simple component. Market research firm TrendForce noted earlier this year that during the HBM4 validation phase, Samsung was ahead in terms of stability due to process improvements. With the growing demand for AI, major customers are likely to utilize Samsung, SK Hynix, and Micron to secure their supply chains. Samsung emphasizes its unique advantage in turnkey capabilities that integrate memory, foundry, system LSI, and advanced packaging. The HBM4E features 1c DRAM and proprietary 4-nanometer logic dies. Given that HBM products require not only high memory cell performance but also quality in base die and packaging, Samsung highlights its comprehensive semiconductor structure as a strength. Power efficiency and heat dissipation improvements are also key points. Samsung claims that the energy efficiency of the HBM4E 12-layer product has improved by 16% compared to its predecessor, with thermal resistance characteristics enhanced by over 14%. As power costs and heat management become critical concerns in AI data centers, both high-speed operation and energy efficiency are becoming essential evaluation criteria for customers. Following the world’s first mass production shipment of HBM4 in February, Samsung is also expanding its supply. Since both HBM4 and HBM4E are based on the combination of 1c DRAM and 4-nanometer base dies, there is a strong sentiment in the industry regarding the likelihood of transitioning HBM4E to mass production. The key factors will be customer certification and actual volume expansion. In the HBM market, the adoption by major AI semiconductor customers will significantly influence performance outcomes more than technology announcements. With Samsung accelerating the supply of HBM4E samples following the mass production of HBM4, there is a growing possibility of changes in the existing competitive landscape starting from the HBM4 generation. Hwang Sang-jun, Executive Vice President of Samsung Electronics' Memory Business, stated, "By successfully completing the mass production of HBM4 and the timely supply of next-generation HBM4E samples, we have solidified Samsung's technological leadership in the market. We will lead the growth of the global AI memory market based on overwhelming technological superiority and proactive investments in production infrastructure."* This article has been translated by AI. 2026-05-29 08:20:00

Samsung Electronics Ships HBM4E 12-Layer Samples to Global Clients Samsung Electronics has begun supplying samples of its next-generation high-bandwidth memory (HBM), the HBM4E 12-layer, to global clients. This move follows the mass production shipment of HBM4 in February, further solidifying Samsung's technological leadership in the AI memory market. As of May 29, industry sources report that Samsung is the first in the world to ship HBM4E 12-layer samples. The new product utilizes 1c DRAM and 4-nanometer logic dies, operating stably at speeds of 14 Gbps per pin and capable of reaching up to 16 Gbps. The bandwidth for a single stack is approximately 3.6 TB per second. Samsung stated that the HBM4E 12-layer product improves energy efficiency by 16% compared to its predecessor and enhances thermal resistance characteristics by over 14%. The capacity is set at 48 GB, with plans to expand the lineup to include 32 GB 8-layer and 64 GB 16-layer products in the future. Market research firm TrendForce previously assessed that Samsung is ahead in HBM4 verification due to improved process stability. The shipment of HBM4E samples is seen as a continuation of Samsung's recovery of leadership since the HBM4 generation. Analysts note that the company is not only achieving high yields but also maintaining a competitive edge in speed, thereby strengthening trust with key clients. 2026-05-29 08:14:00

South Korea Eases Requirements for Companies Returning from Overseas 정부가 해외로 나간 기업들의 국내 복귀를 촉진하기 위해 '유턴기업'의 인정 요청을 대폭 개선한다. 동일성 요건을 완화하고 해외 사업장 구조조정 요건에 대한 면제 범위도 확대하는 것이 핵심이다. 보조금 지원체계도 국내 투자 확대에 더 직접적을 연동되도록 개편한다. The South Korean government is significantly improving the recognition process for companies returning from overseas, known as "returning companies." Key changes include relaxing the requirements for product similarity and expanding exemptions for restructuring overseas operations. The subsidy support system will also be restructured to more directly encourage domestic investment. On May 29, the Ministry of Trade, Industry and Energy presented these plans during an economic ministers' meeting, outlining a strategy for promoting domestic returns. Previously, to be recognized as a returning company, firms had to liquidate or transfer their overseas operations and reduce their overseas production by a certain level before making new investments in South Korea. However, there have been ongoing criticisms that the existing policies do not align with the realities faced by businesses. Companies wishing to maintain their global production networks while also investing domestically found themselves outside the support framework, as they were required to completely reduce or restructure their overseas operations. This was particularly challenging for advanced industries, where maintaining overseas bases is crucial for responding to local markets and managing supply chains. Thus, using overseas production reduction as the sole criterion for determining domestic return was seen as inadequate. The Korea Development Institute (KDI) raised concerns about the effectiveness of reshoring policies in a report published in 2023. The report noted that reshoring companies in South Korea tend to be smaller, labor-intensive, and less productive compared to multinational corporations. Additionally, the employment effects of their domestic investments were found to be lower than those of purely domestic firms, despite receiving more government support. In response, the government plans to focus on several key areas through this new initiative: redesigning the recognition criteria for returning companies, restructuring the subsidy support system, enhancing evaluation and management, and providing close support for strategic attraction and investment implementation. The government will broaden the narrow definition of returning companies. Major countries like the United States and Japan are prioritizing investment support based on securing production capabilities in advanced strategic sectors rather than merely formal requirements. The government aims to revise relevant laws related to returning companies this year and implement them starting next year. The requirement for product and service similarity between overseas operations and domestic return projects will be relaxed. The government will adopt a more flexible approach to similarity assessments to support investments aimed at entering new industries and enhancing business structures. An official from the Ministry of Trade, Industry and Energy explained, "If a traditional auto parts company transitions to producing electric vehicle parts, it previously could not be recognized for returning. We will now acknowledge such companies transitioning to new industries as returning companies, although sudden shifts in industry will still be challenging." Additionally, the scope of exemptions for restructuring overseas operations will be expanded. Exemptions will apply to investments recognized as core production facilities in advanced industries and supply chain sectors. This aims to actively promote the domestic acquisition of advanced manufacturing and innovation capabilities beyond mere formal requirements. The subsidy support system for returning companies will also be restructured. The previous system applied uniform subsidy rates based on a set criteria, which limited the attraction of excellent returning companies, particularly in regional areas. To promote local investment and encourage returning in advanced strategic sectors, the government will overhaul the subsidy system to a negotiation-based approach. This negotiation method will draw on cash support policies for foreign investment companies, determining the scale of support through discussions between the government and companies based on economic impact or strategic sectors. Factors such as non-capital area investments, youth employment creation, advanced strategic technologies, and mother factory status will be comprehensively considered. To actively encourage local investment and the introduction of advanced strategic technologies, the criteria will shift from fixed limits to focusing on subsidy rate ceilings. While general sectors and small-scale investments will continue under the current system, the basic subsidy rate will be adjusted to align with local investment promotion levels. To strengthen investment implementation, the evaluation of domestic investment plans and implementation capabilities will be enhanced from the selection stage of returning companies. A new Domestic Return Practical Committee will be established through amendments to the enforcement decree to systematically manage the selection evaluation and subsidy review processes. Detailed procedures supporting the negotiation-based subsidy system will also be developed. To ensure closer monitoring of investment implementation by returning companies receiving subsidies, the implementation period will be extended from the current three years based on the scale of support. The requirements for implementation will also be improved to reflect trends in manufacturing automation and changes in industrial structure. Potential returning companies with core capabilities in advanced industries, manufacturing AI transitions, and supply chain sectors will be proactively identified and attracted. Dedicated project managers will be assigned to provide close support throughout the investment review and implementation process. Kim Jeong-kwan, Minister of Trade, Industry and Energy, stated, "Returning is becoming a strategic choice about where to center technology development, production, and supply chains, beyond just relocating factories. We will redefine the concept of returning based on feedback from the field and boldly restructure and expand our support methods."* This article has been translated by AI. 2026-05-29 08:04:00

Samsung's Bonus Disparities Spark Debate Among South Korean Firms "I should have raised ducks instead of getting a PhD," said HB Lee, a 33-year-old employee in the LSI division of a major South Korean conglomerate. Such self-deprecating remarks have recently circulated in employee communities. While some support staff in the memory division, benefiting from the AI semiconductor boom, receive bonuses in the tens of millions of won, PhD-level researchers in the loss-making system LSI and foundry divisions receive significantly lower compensation. Lee noted, "These days, there’s talk that even someone raising ducks in the semiconductor division is getting bonuses of 400 to 500 million won. It’s laughable that compensation depends more on which division you belong to than on actual performance." South Korea's export-driven economy has traditionally operated on a trickle-down economics model, where profits from large corporations flow down to subcontractors and small manufacturers. However, there are growing concerns that the current performance bonus conflicts in the AI era are creating a new form of trickle-down effect, exacerbating wage disparities, relative deprivation, and labor disputes across the industrial ecosystem. The competition for performance bonuses, which began in the memory semiconductor sector, is now shaking the distribution standards across South Korean corporate society. The compensation debate sparked by Samsung Electronics and SK Hynix is spreading to the platform, ICT, manufacturing, and bio industries, leading to polarization in the labor market, internal divisions within organizations, and conflicts throughout the supply chain. Professor Park Byeong-jin of Hanyang University’s Business School stated, "The precedent set by Samsung Electronics regarding performance bonuses is likely to have a domino effect on the entire South Korean labor market and the compensation systems of major corporations. The unlimited bonus structure of the country’s top company is becoming a benchmark that raises the compensation expectations of other corporate unions." He added, "If this trend continues, it could lead to performance bonus inflation across the industry, increasing the cost burden on companies." The demand for performance bonuses is intensifying across the industrial sector. The Hyundai Motor and Kia unions are demanding bonuses equivalent to 30% of their net profits this year, while the HD Hyundai Heavy Industries union has included a proposal for sharing 30% of operating profits in this year's negotiations. The Kakao union has raised the possibility of a strike for the first time since its founding, demanding bonuses of 13-14% of operating profits, and LG Uplus is also continuing to demand bonuses at the 30% level. The Doosan Enerbility union, benefiting from a boom in power equipment, has reportedly included a request for a revision of the bonus calculation method in this year's negotiations. SM, a 33-year-old manager at a domestic automotive company, remarked, "Ultimately, it’s a matter of how to distribute limited resources. There can’t be a win-win structure. If one person takes more, someone else has to take less. In the end, one side has to concede, but realistically, who is going to give up money?" Within Samsung Electronics, there is growing backlash over the extreme disparities in performance bonuses between divisions. The joint negotiation team of the Samsung Electronics union announced that a tentative agreement was approved with 73.7% support (46,142 votes) in a vote that closed at 10 a.m. on May 27. The turnout was 95.5%. As a result, Samsung Electronics has temporarily avoided the previously anticipated strike. The agreement includes an average wage increase of 6.2% and the establishment of a "special management performance bonus" for the DS division. This special bonus will be funded by 10.5% of business performance and will be paid in the form of restricted stock units (RSUs). The distribution ratio for the bonus fund is set at 40% for common divisions and 60% for business units. This structure is similar to the bonus system already implemented by SK Hynix, which provides bonuses equivalent to 10% of operating profits. Under the tentative agreement, employees in the memory division are expected to receive a total bonus of up to 600 million won based on an annual salary of 100 million won, combining the special management performance bonus and the existing excess profit incentive (OPI). In contrast, employees in the loss-making system LSI and foundry divisions are expected to receive around 210 million won. Some employees in the DX division, responsible for smartphones and home appliances, are reported to receive about 6 million won. The nearly 100-fold disparity has led to unprecedented "intra-company conflict" within Samsung Electronics. Internal dissent among employees in the non-memory and DX divisions continues even after the approval of the tentative agreement. The number of members in the Donghaeng union, primarily composed of DX division employees, surged from about 2,200 to around 12,800 following the announcement of the tentative agreement. This internal backlash highlights the structural dilemma faced by South Korean companies in the AI boom. They must reward successful divisions while also managing relative deprivation, distrust, and divisions within the organization. SM stated, "In the past, the company would explain that it was difficult due to public sentiment, but employees no longer accept such explanations. The disparities between divisions have become so pronounced that they begin to question the fairness of the structure itself." He added, "One side claims, 'We made money through good sales,' while the other side argues, 'If we hadn’t supported them, that business wouldn’t have operated at all.' When we start to scrutinize contributions, it ultimately leads to everyone feeling wronged." The conflict over performance bonuses has evolved beyond simple labor disputes to encompass competition between divisions, conflicts between job categories, tensions between regular employees and subcontractors, and clashes between primary and secondary contractors, as well as conflicts of interest between shareholders and employees. Particularly within platform and ICT companies, the difficulty of quantifying contributions to revenue generation among developers, marketing, sales, support teams, and management is complicating the conflict. The atmosphere is similar in booming industrial sectors. Samsung Biologics faced its first strike after negotiations broke down earlier this month, and the Doosan Enerbility union is also demanding changes to the bonus calculation method. The repercussions have already extended beyond large corporations. According to a survey on labor costs released by the Ministry of Employment and Labor in September 2025, performance bonuses have emerged as a key variable exacerbating labor market polarization in South Korea. In 2024, bonuses and performance incentives accounted for approximately 24.7% of total wages in large corporations with over 1,000 employees, while small businesses accounted for only about 8%. The widening gap is attributed to performance bonuses. While the gap in fixed salaries, such as base pay, was 4.71 million won for large corporations and 3.99 million won for small businesses, the average monthly performance bonus and incentive was 1.33 million won for large corporations, nearly four times that of small businesses (340,000 won). David Song, a 35-year-old employee at a small IT company in Gangnam, expressed, "For some, it’s tough to make ends meet for a month, while conflicts over bonuses in the tens of millions of won feel like a story from another world. Employees in small businesses can’t raise their voices like those in large corporations." The conflict is also spilling over to subcontractors. The domestic manufacturing sector relies heavily on numerous subcontractors and outsourced labor. As the scale of performance bonuses grows due to the AI boom, debates are intensifying over whether to extend bonuses to employees of subcontractors in areas such as cafeteria services, cleaning, and security. JW Kim, a 28-year-old employee in manufacturing, questioned, "Is it reasonable to pay subcontractor employees 80% of the performance bonus just because they work in the same facility?" He added, "Ultimately, this only breeds resentment toward subcontractors." Concerns are growing that the amendments to the Labor Union Act, which expanded the scope of primary contractors' responsibilities, could lead to demands for negotiations, strikes, and lawsuits from subcontractor unions throughout the supply chain. In fact, the logistics subcontractor union of SK Hynix has demanded collective bargaining to address performance bonus disparities, and the cafeteria union at Hanwha Ocean has also raised the issue of expanding bonuses. The debate over performance bonuses has also led to clashes between shareholders and employees. Some investors worry that when corporate performance declines, shareholders bear the losses, while employees may excessively allocate profits during boom periods to bonuses. In response, Professor Park suggested a realistic alternative: "Instead of simply distributing a percentage of operating profits, it would be better to first reflect the minimum capital costs and dividend resources that should go to shareholders, and then calculate the performance bonus fund based on the remaining economic value added (EVA)." He also proposed increasing the proportion of long-term stock compensation, such as RSUs, instead of excessive cash bonuses. Bonuses above a certain level should be paid in stock that can be disposed of after 3-5 years, encouraging employees to have a greater stake in the company’s value and stock price appreciation rather than focusing on short-term rewards. The conflict over compensation is beginning to change the internal atmosphere of companies. Employees are now constantly comparing compensation not only between companies but also within the same company across divisions, job categories, and organizational affiliations. Engineers in loss-making semiconductor divisions are publicly expressing dissatisfaction online, stating that support staff are receiving higher bonuses simply because they belong to the same organization. Analysts suggest that the community identity that once supported South Korean conglomerates is now being shaken. Hyun Mo, a 32-year-old employee who struggled to secure a position at a refinery, lamented, "In the past, it was considered an 'elite course' to go to a refinery or automotive company based on an electrical engineering degree, but these days, seeing the semiconductor bonus news makes many employees feel like they’re going crazy." Ultimately, South Korean companies find themselves at a crossroads between 'organizational stability' and 'performance differentiation' in the AI era. Professor Park analyzed that Samsung's current performance bonus (OPI) structure has a strong collective reward nature, where if a specific division is profitable, all members within that division receive high compensation together. He stated, "This structure imposes a tremendous burden on companies, as they have to reward 10,000 people equally to retain one key talent." He continued, "In the future, companies should reduce the proportion of collective performance bonuses and convert some of the saved resources into targeted bonuses (Retention Bonuses) directly awarded to irreplaceable key engineers and high performers to alleviate the overall cost burden and prevent the loss of key talent." This trend is partially reflected in Samsung Electronics' tentative agreement, which includes provisions for some of the special bonuses to be paid in restricted stock units (RSUs), indicating a shift from a short-term cash compensation structure to a long-term stock-linked compensation system.* This article has been translated by AI. 2026-05-29 08:02:00