South Korea Labor Minister Says AI Chip Windfalls Should Be Shared With Suppliers

South Korea’s labor minister urged the country’s major IT and semiconductor companies to share excess profits from the artificial intelligence boom with suppliers and workers.

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

Kim, the employment and labor minister, proposed a social dialogue framework involving the government, companies, labor unions and suppliers. He said Samsung’s standout performance was driven not only by the dedication of labor and management, but also by about 1,700 suppliers and local communities that provided water and electricity. New rules for distribution are needed, he added.

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

Kim rejected that criticism, saying opposition claims that his proposal amounts to communism were false. Sharing profits with suppliers would be a reinvestment in the supply chain and could help strengthen the competitiveness of small and mid-sized companies, offering a way to tackle South Korea’s prolonged low-growth trend. Specific measures could include adjusting supply prices paid to partner companies and investing in talent development at smaller firms, he added.