The global economy in 2026 revolves around three semiconductor giants: South Korea's Samsung Electronics and SK Hynix, and Taiwan's TSMC. While oil, automobiles, steel, and finance defined the 20th century, the core drivers of civilization are shifting towards artificial intelligence (AI) and semiconductors as we move into the mid-21st century. AI is not just an industry; it is a new civilizational infrastructure reshaping military, diplomatic, economic, educational, medical, cultural, financial, administrative, and energy systems.
At the heart of this AI civilization are GPUs (graphics processing units), HBM (high-bandwidth memory), advanced foundries, and ultra-fine processes. While U.S. tech giants develop AI platforms, South Korea and Taiwan supply the essential hardware that powers these systems. If the U.S. controls the brain design and operating systems of AI, South Korea and Taiwan hold the memory and production heart of this new civilization.
Today, the semiconductor industry is the strongest pillar of the South Korean economy, with Samsung Electronics and SK Hynix at its core. Together, their market capitalizations account for about 45% of the entire South Korean stock market. This figure reflects not just the size of these companies but also their deep connection to the structure of the South Korean capital market, the returns of the national pension, retirement funds, individual investors' assets, exchange rates, exports, tax revenues, employment, and even national growth rates. Samsung Electronics is a representative national stock with around 5 million individual shareholders, meaning a significant portion of the South Korean population is directly or indirectly linked to the company. SK Hynix has also emerged as a leader in HBM for the AI era, transforming from a memory company into a key player in the global AI supply chain.
Taiwan's TSMC has reached the top in a different way. TSMC is not a memory manufacturer but the world's strongest foundry. Most advanced chips from major global AI and IT companies, including Nvidia, Apple, AMD, Broadcom, and Qualcomm, rely on TSMC's production capabilities. TSMC is not just a manufacturing company; it is a central hub for the world's cutting-edge technology production system. TSMC accounts for about 35-40% of the Taiwanese stock market, and it is difficult to explain Taiwan's exports, investments, exchange rates, growth rates, and national security without considering TSMC. Therefore, the Taiwan Strait issue is not merely a territorial conflict; it is tied to the strategic value of TSMC, often referred to as the 'Silicon Shield.' If TSMC falters, the entire global AI industry and advanced supply chain could be at risk.
However, the true competition for supremacy in AI semiconductors is not determined solely by market capitalization or technological prowess. More crucial is how profits are distributed, reinvested, and how talent is retained, as well as how to balance the interests of shareholders, employees, and the national economy.
The recent controversy over performance bonuses at Samsung Electronics and SK Hynix highlights this issue. Samsung's tentative agreement for 2026 wage negotiations includes a provision to allocate 10.5% of operating profit for special management performance bonuses. SK Hynix also reached an agreement to allocate 10% of operating profit for employee bonuses after union pushback. Employees may justifiably demand to share in the profits when the company performs well. The semiconductor industry operates under intense pressure, requiring round-the-clock research, development, and production. It is undeniable that engineers, researchers, and production workers are central to the company's competitiveness.
The challenge lies in the fact that the semiconductor industry is fundamentally a long-term investment sector. Profits made during boom periods must be used to weather downturns and prepare for next-generation processes. Missing an investment cycle can lead to a widening technology gap that is difficult to close. Both memory and foundry sectors require tens of trillions of won in capital investment, long-term R&D, yield assurance, and customer trust to survive. Allocating a fixed percentage of operating profit to bonuses may enhance predictability in the short term but could weaken investment capacity in the long term.
Particularly concerning is the forecast that if the AI semiconductor supercycle materializes, Samsung and SK Hynix could face performance bonus burdens in the tens of trillions of won or more. Meanwhile, competitors are currently investing their cash. U.S. company Micron is significantly increasing its capital expenditures this year and is constructing large production facilities, including the Clay mega-fab in New York. TSMC is also expanding its capital investments to as much as $56 billion, approximately 85 trillion won, while broadening its production bases in the U.S. and Europe. If Samsung and SK Hynix distribute tens of trillions of won in bonuses while competitors build factories and acquire equipment to secure next-generation production capabilities, the immediate labor peace could lead to long-term competitive disadvantages.
In semiconductors, investment translates directly to future market share. Today's cash distribution influences tomorrow's technological supremacy. However, performance bonuses should not be dismissed. The key is to share performance while establishing more refined and transparent criteria. In the past, Samsung and SK Hynix based bonuses on economic value added (EVA), but complaints about the opacity of this calculation led employees to demand simpler and more intuitive operating profit-based criteria. The companies share responsibility here; if the compensation criteria are not transparent, employees will not trust them. Yet, simplicity does not always equate to a good system. Basing bonuses solely on operating profit may overlook critical factors such as investment, cash flow, shareholder returns, future competitiveness, and contributions to R&D.
Global tech giants and semiconductor companies generally reflect company performance, individual contributions, long-term stock performance, and strategic contributions in their bonus structures. TSMC has a policy of allocating at least 1% of operating profit for bonuses, but the specific amount is determined by a committee of outside directors reviewing the year's performance. Last year, TSMC reportedly distributed bonuses totaling approximately 206.1 billion New Taiwan dollars, or about 9.6 trillion won, to over 90,000 employees. This amount corresponds to about 10% of operating profit, but it is not a fixed formula; rather, it combines board and committee judgments. U.S. companies also utilize not only cash bonuses but also restricted stock units, stock options, and long-term incentives. By granting shares to key talent over several years, they link employee compensation to the company's long-term stock performance. This approach is not just about compensation; it integrates talent retention, shareholder value, and long-term strategy.
Samsung's decision to provide performance bonuses in the form of company stock rather than cash, with some restrictions on sales, marks a significant change. SK Hynix also operates a shareholder participation program that allows employees to receive part of their bonuses in company stock. However, this alone is not sufficient. For stock-based compensation to become a true long-term reward system, it must reflect restrictions on sales, long-term performance criteria, R&D achievements, shareholder returns, investment capacity, and cash flow. While it is desirable for employees to become owners of the company, if it undermines the company's future investment capacity, it risks becoming a short-term distribution logic rather than a genuine sense of ownership.
It is noteworthy that this controversy has expanded into issues of fiduciary duty to shareholders. Operating profit is not solely the employees' share; it encompasses the risks of shareholder capital, taxes for the state, the ecosystem of partner companies, future investment resources, and funds for downturns. A corporation is a product of labor and a combination of capital, technology, and market trust. Therefore, the institutional allocation of a fixed percentage of operating profit ahead of taxes, investments, dividends, and R&D is not merely a matter for labor and management to resolve. At a minimum, transparent procedures and explanations that the board, shareholders, and market can understand are necessary. This is not an argument for neglecting labor; rather, it is a crucial mechanism for sustainable performance sharing.
If Samsung Electronics and SK Hynix are the heart of the South Korean economy, that heart must not only beat strongly but also endure over time. If profits are shared during boom periods while investment capacity diminishes during downturns, maintaining a significant competitive edge becomes impossible. The semiconductor industry is not one that ends with a single boom. The future battlefield will be much broader, encompassing AI servers, HBM, next-generation DRAM, NAND, foundry, packaging, glass substrates, power semiconductors, and on-device AI. What is needed now is a national strategic compensation system that transcends labor-management conflict. A balance is required that provides fair compensation to employees, predictable returns to shareholders, sufficient investment capacity for companies, and a sustainable industrial foundation for the nation.
The United States is well aware of this structure. That is why the CHIPS Act aims to attract Samsung and TSMC to American soil. The U.S. strategy is not merely about attraction; it seeks to incorporate advanced semiconductor production capabilities into its national security framework to maintain AI supremacy. China is pursuing a similar path, attempting to achieve self-sufficiency in AI chips centered around Huawei and pouring massive funds into domestic memory and foundry production. Japan, too, is dreaming of a revival in advanced foundry led by Rapidus, aiming to turn its strengths in materials, equipment, and precision chemistry back into strategic assets.
The U.S. is organizing alliances, China is pursuing self-sufficiency, and Japan aims to dominate the supply chain. In this grand scheme, South Korea holds two jewels in Samsung Electronics and SK Hynix. Therefore, South Korea's tasks are clear: first, maintain a significant lead in HBM and next-generation memory; second, continue to challenge in foundry and advanced packaging; third, reform labor-management compensation systems to align with global standards in a transparent and long-term manner; fourth, establish governance that is acceptable to the national pension, individual shareholders, employees, and partner companies; and fifth, treat semiconductors not merely as an export industry but as a matter of national security.
The 19th century was the era of Britain, and the 20th century was the era of the United States. The world in the mid-21st century stands before a new question: Where is the core production base of AI civilization? The answer is becoming increasingly clear.
It is Northeast Asia, where South Korea, Taiwan, Japan, and China converge. While military power remains overwhelmingly with the U.S. and finance is still dominated by the dollar, the key axis of AI semiconductor production is thriving in East Asia. Samsung Electronics and SK Hynix supply the memory for AI, while TSMC produces its brain. These three companies are not just private enterprises; they are strategic assets supporting the foundation of the global digital economy.
If oil drove the 20th century, semiconductors are driving 21st-century civilization. The heart of that semiconductor industry is now beating in South Korea and Taiwan. However, no matter how strong the heart, if it misuses its resources, the body cannot endure for long. The performance bonus controversy at Samsung Electronics and SK Hynix is not merely a wage issue; it poses a national question about how South Korea will share, invest, and preserve the wealth generated in the AI era for future generations.
The answer does not lie on one side. There is no technology without labor, no significant advantage without investment, and no capital market without shareholder trust. Now, South Korean semiconductors must answer a larger question: How to share today's achievements without losing tomorrow's supremacy; this must become the new common sense of South Korea in the AI semiconductor era.
※ This article was generated using generative AI and has been reviewed by an editor.
At the heart of this AI civilization are GPUs (graphics processing units), HBM (high-bandwidth memory), advanced foundries, and ultra-fine processes. While U.S. tech giants develop AI platforms, South Korea and Taiwan supply the essential hardware that powers these systems. If the U.S. controls the brain design and operating systems of AI, South Korea and Taiwan hold the memory and production heart of this new civilization.
Today, the semiconductor industry is the strongest pillar of the South Korean economy, with Samsung Electronics and SK Hynix at its core. Together, their market capitalizations account for about 45% of the entire South Korean stock market. This figure reflects not just the size of these companies but also their deep connection to the structure of the South Korean capital market, the returns of the national pension, retirement funds, individual investors' assets, exchange rates, exports, tax revenues, employment, and even national growth rates. Samsung Electronics is a representative national stock with around 5 million individual shareholders, meaning a significant portion of the South Korean population is directly or indirectly linked to the company. SK Hynix has also emerged as a leader in HBM for the AI era, transforming from a memory company into a key player in the global AI supply chain.
Taiwan's TSMC has reached the top in a different way. TSMC is not a memory manufacturer but the world's strongest foundry. Most advanced chips from major global AI and IT companies, including Nvidia, Apple, AMD, Broadcom, and Qualcomm, rely on TSMC's production capabilities. TSMC is not just a manufacturing company; it is a central hub for the world's cutting-edge technology production system. TSMC accounts for about 35-40% of the Taiwanese stock market, and it is difficult to explain Taiwan's exports, investments, exchange rates, growth rates, and national security without considering TSMC. Therefore, the Taiwan Strait issue is not merely a territorial conflict; it is tied to the strategic value of TSMC, often referred to as the 'Silicon Shield.' If TSMC falters, the entire global AI industry and advanced supply chain could be at risk.
However, the true competition for supremacy in AI semiconductors is not determined solely by market capitalization or technological prowess. More crucial is how profits are distributed, reinvested, and how talent is retained, as well as how to balance the interests of shareholders, employees, and the national economy.
The recent controversy over performance bonuses at Samsung Electronics and SK Hynix highlights this issue. Samsung's tentative agreement for 2026 wage negotiations includes a provision to allocate 10.5% of operating profit for special management performance bonuses. SK Hynix also reached an agreement to allocate 10% of operating profit for employee bonuses after union pushback. Employees may justifiably demand to share in the profits when the company performs well. The semiconductor industry operates under intense pressure, requiring round-the-clock research, development, and production. It is undeniable that engineers, researchers, and production workers are central to the company's competitiveness.
The challenge lies in the fact that the semiconductor industry is fundamentally a long-term investment sector. Profits made during boom periods must be used to weather downturns and prepare for next-generation processes. Missing an investment cycle can lead to a widening technology gap that is difficult to close. Both memory and foundry sectors require tens of trillions of won in capital investment, long-term R&D, yield assurance, and customer trust to survive. Allocating a fixed percentage of operating profit to bonuses may enhance predictability in the short term but could weaken investment capacity in the long term.
Particularly concerning is the forecast that if the AI semiconductor supercycle materializes, Samsung and SK Hynix could face performance bonus burdens in the tens of trillions of won or more. Meanwhile, competitors are currently investing their cash. U.S. company Micron is significantly increasing its capital expenditures this year and is constructing large production facilities, including the Clay mega-fab in New York. TSMC is also expanding its capital investments to as much as $56 billion, approximately 85 trillion won, while broadening its production bases in the U.S. and Europe. If Samsung and SK Hynix distribute tens of trillions of won in bonuses while competitors build factories and acquire equipment to secure next-generation production capabilities, the immediate labor peace could lead to long-term competitive disadvantages.
In semiconductors, investment translates directly to future market share. Today's cash distribution influences tomorrow's technological supremacy. However, performance bonuses should not be dismissed. The key is to share performance while establishing more refined and transparent criteria. In the past, Samsung and SK Hynix based bonuses on economic value added (EVA), but complaints about the opacity of this calculation led employees to demand simpler and more intuitive operating profit-based criteria. The companies share responsibility here; if the compensation criteria are not transparent, employees will not trust them. Yet, simplicity does not always equate to a good system. Basing bonuses solely on operating profit may overlook critical factors such as investment, cash flow, shareholder returns, future competitiveness, and contributions to R&D.
Global tech giants and semiconductor companies generally reflect company performance, individual contributions, long-term stock performance, and strategic contributions in their bonus structures. TSMC has a policy of allocating at least 1% of operating profit for bonuses, but the specific amount is determined by a committee of outside directors reviewing the year's performance. Last year, TSMC reportedly distributed bonuses totaling approximately 206.1 billion New Taiwan dollars, or about 9.6 trillion won, to over 90,000 employees. This amount corresponds to about 10% of operating profit, but it is not a fixed formula; rather, it combines board and committee judgments. U.S. companies also utilize not only cash bonuses but also restricted stock units, stock options, and long-term incentives. By granting shares to key talent over several years, they link employee compensation to the company's long-term stock performance. This approach is not just about compensation; it integrates talent retention, shareholder value, and long-term strategy.
Samsung's decision to provide performance bonuses in the form of company stock rather than cash, with some restrictions on sales, marks a significant change. SK Hynix also operates a shareholder participation program that allows employees to receive part of their bonuses in company stock. However, this alone is not sufficient. For stock-based compensation to become a true long-term reward system, it must reflect restrictions on sales, long-term performance criteria, R&D achievements, shareholder returns, investment capacity, and cash flow. While it is desirable for employees to become owners of the company, if it undermines the company's future investment capacity, it risks becoming a short-term distribution logic rather than a genuine sense of ownership.
It is noteworthy that this controversy has expanded into issues of fiduciary duty to shareholders. Operating profit is not solely the employees' share; it encompasses the risks of shareholder capital, taxes for the state, the ecosystem of partner companies, future investment resources, and funds for downturns. A corporation is a product of labor and a combination of capital, technology, and market trust. Therefore, the institutional allocation of a fixed percentage of operating profit ahead of taxes, investments, dividends, and R&D is not merely a matter for labor and management to resolve. At a minimum, transparent procedures and explanations that the board, shareholders, and market can understand are necessary. This is not an argument for neglecting labor; rather, it is a crucial mechanism for sustainable performance sharing.
If Samsung Electronics and SK Hynix are the heart of the South Korean economy, that heart must not only beat strongly but also endure over time. If profits are shared during boom periods while investment capacity diminishes during downturns, maintaining a significant competitive edge becomes impossible. The semiconductor industry is not one that ends with a single boom. The future battlefield will be much broader, encompassing AI servers, HBM, next-generation DRAM, NAND, foundry, packaging, glass substrates, power semiconductors, and on-device AI. What is needed now is a national strategic compensation system that transcends labor-management conflict. A balance is required that provides fair compensation to employees, predictable returns to shareholders, sufficient investment capacity for companies, and a sustainable industrial foundation for the nation.
The United States is well aware of this structure. That is why the CHIPS Act aims to attract Samsung and TSMC to American soil. The U.S. strategy is not merely about attraction; it seeks to incorporate advanced semiconductor production capabilities into its national security framework to maintain AI supremacy. China is pursuing a similar path, attempting to achieve self-sufficiency in AI chips centered around Huawei and pouring massive funds into domestic memory and foundry production. Japan, too, is dreaming of a revival in advanced foundry led by Rapidus, aiming to turn its strengths in materials, equipment, and precision chemistry back into strategic assets.
The U.S. is organizing alliances, China is pursuing self-sufficiency, and Japan aims to dominate the supply chain. In this grand scheme, South Korea holds two jewels in Samsung Electronics and SK Hynix. Therefore, South Korea's tasks are clear: first, maintain a significant lead in HBM and next-generation memory; second, continue to challenge in foundry and advanced packaging; third, reform labor-management compensation systems to align with global standards in a transparent and long-term manner; fourth, establish governance that is acceptable to the national pension, individual shareholders, employees, and partner companies; and fifth, treat semiconductors not merely as an export industry but as a matter of national security.
The 19th century was the era of Britain, and the 20th century was the era of the United States. The world in the mid-21st century stands before a new question: Where is the core production base of AI civilization? The answer is becoming increasingly clear.
It is Northeast Asia, where South Korea, Taiwan, Japan, and China converge. While military power remains overwhelmingly with the U.S. and finance is still dominated by the dollar, the key axis of AI semiconductor production is thriving in East Asia. Samsung Electronics and SK Hynix supply the memory for AI, while TSMC produces its brain. These three companies are not just private enterprises; they are strategic assets supporting the foundation of the global digital economy.
If oil drove the 20th century, semiconductors are driving 21st-century civilization. The heart of that semiconductor industry is now beating in South Korea and Taiwan. However, no matter how strong the heart, if it misuses its resources, the body cannot endure for long. The performance bonus controversy at Samsung Electronics and SK Hynix is not merely a wage issue; it poses a national question about how South Korea will share, invest, and preserve the wealth generated in the AI era for future generations.
The answer does not lie on one side. There is no technology without labor, no significant advantage without investment, and no capital market without shareholder trust. Now, South Korean semiconductors must answer a larger question: How to share today's achievements without losing tomorrow's supremacy; this must become the new common sense of South Korea in the AI semiconductor era.
※ This article was generated using generative AI and has been reviewed by an editor.
* This article has been translated by AI.
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