The dramatic last-minute agreement between Samsung Electronics (005930.KS) and its union has averted the immediate crisis of a general strike, but the episode—in which a single company's labor dispute threatened the entire national economy—has raised a weighty question about Korea's heavy dependence on semiconductors. Concerns over the "growth illusion" masked by the chip super-cycle and over industrial polarization have already been voiced repeatedly. Yet the real-world crisis, in which an excessive strike nearly halted semiconductor production, laid bare the fragile growth base of an economy leaning on a single industry. The government even raised the possibility of invoking emergency arbitration—a measure that had been all but dormant for 21 years—out of concern over "economic losses on an unimaginable scale," and stepped up to mediate between labor and management.
With the general strike crisis now past its peak, Korea's economy appears to have escaped the immediate danger. If the Samsung strike risk—capable of shaving up to 0.5 percentage points off the growth rate—is resolved, growth in the 2 percent range may be achievable this year. But the precarious growth structure, excessively dependent on the capabilities of major chipmakers, remains intact. The National Assembly Budget Office pointed out in a report on the 20th that the share of semiconductors in Korea's exports from January to April this year reached 35.9 percent, expanding by 11.7 percentage points from the previous year's average, indicating that the chip-skewed growth structure has deepened. If the "K-shaped" polarization between semiconductors and other industries—as wide as the bonus gap between Samsung's chip (DS) and non-chip (DX) divisions—is not resolved, there is no telling when the national economy will again be swayed by variables in a single industry.
The Samsung Electronics episode must serve as an opportunity to look back on and improve the structural vulnerabilities of an economy that looks only to semiconductors. The semiconductor boom cycle cannot last forever. With Samsung Electronics and SK hynix (000660.KS), the chip duo, accounting for 60 percent of major conglomerates' operating profits and half of the KOSPI's market capitalization, it is difficult for the warmth of a stock market boom and economic recovery to reach the labor market and ordinary households' wallets. Now, while the chip boom is buying time, is the opportunity to nurture growth engines that can succeed semiconductors in driving the economy—such as robotics, defense, nuclear power, and biotechnology—to improve the lopsided industrial structure and lay the foundation for sustainable growth. Of course, the first priority must be ensuring that the labor-management agreement is not shaken by shareholder backlash or union votes, and that the strike risk is fully dispelled. The government, too, must spare no effort in pursuing "reasonable mediation" so that the union's demand for an "N percent bonus" does not spread across the industry and exacerbate social conflict.
