Industry Minister Kim Jung-kwan urged for proactive reinvestment of profits generated by the thriving semiconductor sector to establish Korea as a global leader in the age of artificial intelligence (AI).
Kim commented in a social media post during ongoing debates in Korea regarding the optimal method to distribute or utilize unexpected profits from major semiconductor firms.
Also Read: Top Vietnamese Leader Begins Official Visit to Thailand
The controversy has intensified since Samsung Electronics, South Korea's largest conglomerate and the leading memory chip manufacturer globally, became involved in a labor-management dispute regarding performance-based bonuses, with predictions suggesting the company's operating profit could hit 300 trillion ($199.5 billion) this year due to the worldwide AI surge.
"The world has entered a race against time to secure leadership in the AI sector. In key AI industries, including semiconductors, an all-out competition with national stakes is under way, with rival countries working to become winners in the AI era through massive investments on an unprecedented scale," Kim wrote in a Facebook post.
"We are at a critical moment where we need to channel the profits generated by the semiconductor industry into productive reinvestment in preparations for the future," he stressed.
Also Read: Incheon Airport to Expand Smart Pass Corridors for Faster Boarding
After months of conflict, labor and management came to a wage agreement last week, where Samsung agreed to provide a special semiconductor performance bonus amounting to 10.5 percent of business performance earnings, with no limit.
The minister stated that the semiconductor industry must not become "complacent" with its current achievements, but instead remain alert to enhance competitiveness and seek new growth opportunities in next-generation semiconductors and the foundry sector.
"Let me emphasize once again: the foremost principle in the use of corporate profits must be productive reinvestment," he wrote, vowing government support for companies making bold investment decisions, from financial assistance to regulatory reforms.
In contrast to the comments made by the industry minister, Labor Minister Kim Young-hoon has advocated for a public discussion regarding the social distribution of conglomerates' surplus profits, arguing that this approach could foster shared and sustainable growth for both large corporations and their suppliers.
Previously, the industry ministry explored strategies to speed up the artificial intelligence (AI) adoption in the battery sector, which is currently experiencing slow growth due to the downturn in the electric vehicle (EV) market.
Also Read: Hyundai Rotem Wins 2 State-Backed R&D Projects for AI Robotics
The Ministry of Trade, Industry, and Resources held discussions with officials from prominent battery manufacturer LG Energy Solution Ltd. (LGES) is investigating ways to assist the local battery sector in enhancing its manufacturing competitiveness as part of the government's effort to encourage the AI transformation within the manufacturing industry.
During the meeting held at LGES' smart manufacturing site in Cheongju, both parties talked about strategies to assist local battery manufacturers in integrating AI technologies to enhance production efficiency and sustain competitiveness against international competitors, as stated by the ministry.
The LGES has implemented digital twin technology in its cylindrical battery manufacturing plant, boosting production speed by over 50 percent while cutting down on investment expenses.