In March, as I observed the construction site of Samsung Electronics' P4 plant in Pyeongtaek, I felt the immense pressure the company is under. To break through the limits of ultra-fine processes, Samsung invests tens of trillions of won annually in capital expenditures and pours astronomical amounts into research and development to secure global dominance in high-bandwidth memory (HBM). The semiconductor production site is truly a battleground where fierce competition unfolds daily.
However, the recent debate over 'redistributing excess semiconductor profits' among government, political circles, and parts of society seems completely disconnected from the intensity of the industry, prompting a sigh of frustration. The government hastily raised this issue without thorough deliberation, exacerbating confusion in the industry and social conflict. It appears to be a reckless game that forgets the basic principles of a market economy.
What exactly is the definition of 'excess profits'? Companies are economic entities that take risks and innovate to generate profits. The moment legitimate earnings are branded with the scarlet letter of 'excess,' the fruits of their labor are misinterpreted as unearned income or something that should be reclaimed. Discussing profit distribution solely based on increased numbers, without presenting rational criteria for what constitutes 'reasonable profit' versus 'excess profit,' is sheer arrogance.
The various proposed methods for distribution, such as allocating to supply chain partners, establishing special purpose taxes, and supporting AI-affected groups, leave one speechless. This represents an unjustified intervention by the state into corporate profits and a dangerous infringement on shareholders' legitimate rights.
A greater contradiction lies in the 'asymmetry of losses.' The semiconductor industry is known for its significant fluctuations in performance based on market cycles. Just last year, until the first half, Samsung Electronics' semiconductor division faced massive losses, threatening its very existence. In 2024 and 2025, it was unable to pay corporate taxes for two consecutive years, reflecting the urgent crisis in its semiconductor business. Yet, during this period of losses, neither the government nor society provided any compensation for even a single won.
The painful losses were solely borne by the company and its shareholders. In contrast, the logic that seeks to claim a 'social share' only from the profits reaped during an upswing cannot be explained by any principles of capitalism. There is a historical precedent in Sweden, where attempts to collect corporate profits to create worker funds were abandoned after debates over property rights and socialism.
Major competitors like the United States, Taiwan, and Japan are pouring unprecedented subsidies and tax benefits into maximizing corporate profit-making capabilities. South Korea stands alone in viewing the profits earned by companies as targets for social reclamation rather than future investment. It is akin to tying sandbags to oneself while competitors are sprinting ahead.
Rival companies such as Taiwan's TSMC and the U.S. firms Intel and NVIDIA are unleashing astronomical funds backed by national support toward future technologies. The profits earned by semiconductor companies are not 'excess money' to be stored away; they are essential resources for laying down advanced production lines and surviving fierce competition.
While the government publicly praises semiconductors as a strategic national industry, it simultaneously stirs up conflict by pondering how to distribute the hard-earned resources of companies. What is needed now is not a futile debate on 'how to seize and distribute the money companies have earned.'
It is time to rigorously consider how companies can invest more boldly to survive in the global competition for dominance. Before coveting the pockets of businesses, the government must seriously reflect on its fundamental role in safeguarding the survival of the national industry.
* This article has been translated by AI.
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