Korea furious at SK hynix union for 'money feast'

Song Ho-keun The author is a columnist of the JoongAng Ilbo, a chair professor and director of Doheon Academy, Hallym University. SK hynix has hit the jackpot. It is a heavenly gift that neither Hynix employees nor semiconductor experts had expected. For 10 years after the acquisition, the company wandered through a slump, except for one brief upturn. It was in 2019 that the CEO resolved to turn the company into one with a market capitalization of 100 trillion won ($67.9 billion), and seven years later it has become 10 times that, a 1 quadrillion won company. At the time, compensation and encouragement were needed for 10 years of struggle. Morale rose with a modest performance bonus and stock awards. In 2024, when revenue surged, a 10 percent bonus based on 10 trillion won in operating profit was adopted. No one expected operating profit in the tens of trillions of won. But now, the projected operating profit for 2026 is 150 trillion won. Without readjustment, the bonus pool would be 15 trillion won, and with 35,000 employees, that would amount to 430 million won per person, excluding salary. Four hundred thirty million won per person. Envy lasts only a moment before resentment sets in. Sk hynix has entered the most prestigious tier of the job market. Samsung, the No. 1 company, is unlikely to stand still. For Samsung Electronics' 76,000 union members to receive bonuses on the level of SK hynix, the amount would exceed 40 trillion won, or 15 percent of expected operating profit. The union has declared a strike and begun internal discipline, and it remains to be seen what agreement will emerge from the government-mediated "post-adjustment" process by today. A jackpot and performance bonuses are exhilarating things. But is 15 percent of operating profit right? To answer that, one must look at the arduous persistence behind HBM, or high bandwidth memory, the protagonist of this windfall. It was only at the end of 2023 that the existence of HBM was placed on the agenda of SK hynix's board. Many engineers who had been in charge of HBM innovation repeatedly suffered failure and frustration, and some left the company, but SK hynix did not abandon the task. Samsung, by contrast, scrapped the HBM process, which had been regarded as nothing more than a 1 percent derivative product. HBM is the crown jewel of technological innovation. Twelve 8-gigabit dynamic random access memory (DRAM) chips, barely visible under a microscope, are stacked to create an integrated column, and 2,048 of those semiconductor columns are erected to make HBM. A single unit is one centimeter (0.39 inches) on each side and 120 square millimeters (0.19 square inches) in size. This made the Nvidia project possible and activated the high-capacity data association functions of AI. Samsung restarted the process it had abandoned and succeeded in manufacturing HBM4E. The unit price is somewhat high. The two companies' share of the HBM market is around 70 percent, and Korea has become the kingdom of HBM manufacturing. How was this possible? Why not Japan? Korea is the royal horse ranch supplying the finest warhorses of the AI age. The owner of that horse ranch is the conglomerate, which has had to go in and out of prison whenever governments changed. By contrast, at the center of Japan's zaibatsu stands the bank. Astronomical amounts of money can be invested only after receiving approval from bank managers. In Korea, however, the determination and unlimited responsibility of conglomerate families are the final authority for raising and deploying capital. Semiconductors are a massive-scale equipment industry and, at the same time, an advanced human-capital industry. Without Korea's conglomerate structure, things like the Yongin and Pyeongtaek clusters could not even be dreamed of. At the Yongin cluster, which spans nearly 1 million pyeong (35,583,175 square feet), four fabs are under construction. One fab costs 120 trillion won, and about 600 trillion won must be pour...