Democratic Party leader Jung Cheong-rae celebrated on the 15th, saying, "Rejoice, everyone. At this moment, Korea's KOSPI index has surpassed 8002." He explained the reason, saying, "Foreign capital is investing with confidence because trust has risen as Korea is being normalized as a nation."
Jung and the government appear to believe the stock market rally stems from "rooting out insurrection," but most equity investors know the real driver is the semiconductor boom. Samsung Electronics (005930.KS) and SK hynix (000660.KQ) have led the index higher amid the entry into an artificial intelligence (AI) super-cycle. The government may have provided some support, but it is awkward for politicians to credit themselves and engage in self-praise.
Samsung Electronics, which has driven the stock market rally and the rebound in various economic indicators, now faces its greatest crisis. The Samsung Electronics labor union, demanding massive performance bonuses, is moving toward a full-scale strike. Samsung Electronics has reportedly begun a "warm-down" process to adjust production to minimize damage from the strike. JP Morgan has projected that the strike could cut Samsung Electronics' annual operating profit by more than 40 trillion won.
Yet Jung has not said a single word about the Samsung Electronics strike. While candidates running in local elections are all drawing up blueprints to "attract Samsung Electronics factories," it is hard to find any candidate calling for the strike to end in order to preserve corporate competitiveness. By contrast, opposition People Power Party leader Jang Dong-hyuk has demanded action, saying, "A strike that will cause tens of trillions of won in losses is becoming reality," and urging authorities to "stop the strike first." The party is also calling on the government to invoke emergency arbitration. It is hard to dismiss suspicions that Jung and the Democratic Party are holding back because they are mindful of the union ahead of the election.
If Samsung Electronics falters, the domestic stock market will inevitably contract. The bigger problem, beyond the stock market, is that the core competitiveness of the semiconductor industry, which underpins the Korean economy, could weaken. What politicians need to do is not pat themselves on the back. The economy must not be judged by political yardsticks. Pyeongtaek in Gyeonggi Province is not far away. How about Jung, who has been touring every corner of the country, paying a visit to the Samsung Electronics union? With every minute counting toward resolving the situation, the giant ruling party is also expected to lend its weight.
