Barron's Quotes Gi-Wook Shin on How Korea’s Semiconductor Boom Is Creating Social Instability
Barron's Quotes Gi-Wook Shin on How Korea’s Semiconductor Boom Is Creating Social Instability
Record profits led to significant employee bonuses, sparking turmoil, including internal union disputes.
South Korea's stock market has been the world's hottest over the past year, with the Kospi Index surging 165% on the back of the country’s two semiconductor powerhouses, Samsung Electronics and SK Hynix. This new territory "is creating a lot of issues within Korea," Stanford sociologist Gi-Wook Shin, director of APARC's Korea Program, tells Barron's.
The magazine's story – South Korea Has a Chip Conundrum – Huge Profits and a Serious Selloff – highlights how the two companies' mind-boggling earnings and bonuses have opened something of a Pandora’s box of social and economic friction. For example, disgruntled employees at less-privileged Samsung divisions are leaving their union and trying to form a new one, Shin says.
The story notes, however, that these controversies "might look like a mild kerfuffle if the chip makers’ shares keep falling back to earth." Despite a 150% year-to-date gain, Samsung shares dropped 16% last week amid foreign investor sales and leveraged local buying.