Senior Blue House official calls for returning Samsung, SK's 'excess' chip profits to the public

Korea's presidential policy chief proposed a "public dividend" system to share record-high profits earned by Samsung Electronics and SK hynix with all Koreans because "their gains are built on an industrial foundation built over decades by the entire population."

The remarks by Kim Yong-beom, the presidential chief of staff for policy, come as pressure mounts on chipmakers over whether their soaring profits should be redistributed as employee compensation, reinvested in the company or returned to shareholders.

"Korea could become a nation capable of generating sustained excess profits for the first time if demands for memory and [relevant] infrastructure are a lasting structural shift [rather than a cyclical upswing] in the era of AI," Kim wrote on his Facebook on Monday night.

He described AI as an infrastructure business rather than a software one, arguing that Korea occupies a uniquely advantageous position because it possesses an integrated industrial supply chain spanning memory semiconductors, batteries, displays, precision manufacturing, power equipment and industrial automation.

"Korea now has a chance to break out of its old cyclical export model and shift towards an economy built on technological dominance," Kim said. "That is the essence of the possibility that lies in front of Korea."

"Excess profits generated in the AI era will inevitably become concentrated," Kim said, adding that this could accelerate the K-shaped polarization of wealth and income. K-shaped polarization refers to a phenomenon where different industries experience sharply divergent economic outcomes, with one segment growing wealthier and better resourced while another falls further behind.

"The gains of the AI infrastructure era are not the result of individual companies alone," Kim wrote. "All of their gains are built on an industrial foundation that has been built over decades by the entire population. Part of those gains should therefore be structurally returned to all Koreans."

Kim raised a range of possibilities for the so-called public dividend: startup funding for young entrepreneurs; basic income support for rural and fishing communities; assistance for artists; stronger pensions for older people; and education accounts to help workers adapt to the AI era.

"A rare historic opportunity now lies in front of Korea," Kim said. "Beyond a country that supplies AI infrastructure, it can become the first country to translate AI-era excess profits into tangible improvements in people's lives."

Throughout the post, Kim repeatedly employed the term "excess profit" — earnings generated through a competitive advantage, structural monopoly or oligopoly power rather than normal market competition.

His language strongly implied that he sees the profits now being earned by chipmakers — notably Samsung Electronics and SK hynix — as exceeding ordinary competitive returns. He also referred to the emergence of an "economy based on technological monopoly."

Amidst controversy sparked by Kim's remarks, the Blue House stressed that this was not its official position.

"The content posted on social media by Kim is a personal opinion unrelated to internal discussions or reviews within the Blue House," a presidential official said in a press release later Tuesday.

In addition, Industry Minister Kim Jung-kwan said on April 27 that Samsung's profits were inseparable from broader public contributions.

"The achievement of Samsung Electronics is tied to complicated infrastructure, supplier networks, more than four million retail investors and the National Pension Service," Kim said. "We need to ask whether these profits should be divided only among the company's internal stakeholders," he said.

The policymakers' remarks add to an increasingly contentious social debate over who should benefit from Korea's AI-fueled industrial boom.

Unionized employees at Samsung Electronics have recently demanded that the company allocate 15 percent of operating profits to employee bonuses and abolish existing incentive caps. The sizable portion of corporate operating profits should be returned as employee compensation, the unionized workers argue.

An organization representing the interests of Korean shareholders opposed the union's demand, saying that the union's move "undermines the company's future value and ordinary shareholder dividend rights."

The debate has spilled into the political arena.

"The semiconductor boom had been built at the expense of the sacrifice and patience of farmers and fishermen during successive FTA negotiations that opened Korea's agricultural markets," ruling Democratic Party (DP) Rep. Mun Geum-ju said in his statement on April 28.

"A part of profits should be redirected to rural communities," Mun said.

As the June 3 local elections near, Kim Yong-beom has increasingly positioned himself at the center of politically sensitive economic debates. He criticized Korea's financial system for imposing high interest rates on low-credit consumers while offering preferential rates to wealthier borrowers in his Facebook posts between May 1 and 3.

Noting a growing "financial polarization," Kim called himself — a lifelong economic bureaucrat — an "accomplice".

Despite Kim's outspoken rhetoric, the ruling DP has so far sought to distance itself from his proposal. Rep. Lee Ju-hee, the party's floor spokesperson, said on Monday that the party "has not directly discussed" Kim's proposal to share corporate profits with the public.   

Experts remain skeptical of political calls to share corporate profits with the public.   

"With the recent semiconductor boom, the government is already seeing substantial additional corporate tax revenue," said Cho Dong-geun, professor emeritus of economics at Myongji University. "Those resources would be better used to reduce national debt or support future industries through research and development, infrastructure expansion and strategic investment."

"The idea that the government should effectively redistribute profits created by companies through competition and large-scale investment can be quite controversial from the perspective of a market economy," he said. "A concept such as a 'public dividend,' where excessive corporate profits are directly distributed to citizens, requires a very cautious approach."

Kim Gi-Seung, an economics professor at Pusan National University, expressed support for broader social sharing, while cautioning against government intervention in corporate profit allocation.

"The recent gains in the AI industry and semiconductors are the product of multiple factors accumulated over a long period — industrial infrastructure, education systems, industrial ecosystems and government policy," Kim said. "In that sense, it is understandable that some people believe part of those gains should be returned to society."

"Yet, the concept of 'excess profit' remains economically ambiguous," he continued. "If the government approaches this by retrospectively judging and reclaiming corporate profits, it could discourage investment and weaken incentives for innovation."

Prof. Kim stressed that what matters most is how to use additional resources to strengthen long-term economic productivity.

"The real question is how such profits can be channeled to enhance socioeconomic productivity, such as future investment, industrial competitiveness, talent development, AI transition education and support for vulnerable groups," Kim said. "It is also important to recognize that companies themselves ultimately have the deepest understanding of industrial realities in global competition."

Concerns are also emerging within the business community.

"The AI semiconductor industry requires continuous upfront investment worth tens of trillions of won," a business executive said. "The debate over redistributing excess profits could send a negative signal to companies making long-term investment decisions. Rather than turning corporate profit allocation into a political and social battleground, the issue needs to be approached from the perspective of long-term industrial competitiveness."

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY YOON SUNG-MIN, LEE YOUNG-KEUN [lee.soojung1@joongang.co.kr]