South Korea now faces a national decision: Which industries are so essential to the country’s survival that their paralysis can no longer be treated as just another workplace dispute?
In 2025, Korea’s exports hit a record $709 billion, with semiconductors accounting for 24.4 percent of that total, driven by demand for AI chips. Although semiconductors are Korea’s top export and are critical to economic security, the country lacks robust legal protections for this key sector against industrial disruption.
The contrast with Korea’s defense industry is noteworthy. Defense exports amounted to about $15 billion, or 2.2 percent of total exports. Yet the defense industry’s role as a foundation of national security is widely recognized. Production of key defense assets, such as K9 and K2 tanks, missile systems, and Aegis-class vessels, continues uninterrupted to uphold this responsibility. Management and workers in the defense sector have long shared a commitment to the national interest.
Korean law already reflects this principle by providing a legal mechanism to secure uninterrupted production. Article 41, Paragraph 2, of the Trade Union and Labor Relations Adjustment Act bars certain workers in major defense industries from striking in core functions such as manufacturing, assembly, maintenance, and performance testing. Korea has therefore accepted a clear principle: When an industry is vital to national security, strike rights may be specially limited for the broader public interest.
This raises an urgent and pressing question: If Korea protects defense production despite its relatively small export share of 2.2 percent, why is semiconductor production — nearly one-quarter of national exports and central to economic security at 24.4 percent — still lacking comparable protection? Korea must seriously and swiftly consider applying a comparable legal principle to the semiconductor industry before disruption occurs.
The urgency of the situation is heightened by the labor dispute at Samsung Electronics. Government-mediated negotiations have broken down, and the union plans a major strike beginning May 21. Its demands include allocating 15 percent of annual operating profit to performance bonuses, removing bonus caps, and making those changes permanent. Korean officials have warned that a prolonged strike could hurt exports, growth, and investor confidence, underscoring the need for immediate attention.
The compensation debate is also significant. Global technology leaders often use long-term, equity-based incentive systems that align workers’ interests with the company’s future. Korea, however, appears to be moving toward a more short-term cash-payout model. SK hynix’s move toward profit-linked bonuses has influenced Samsung’s union demands. If Korea’s chipmakers increasingly prioritize cash distributions from annual profits, investment in future fabrication facilities, R&D, and long-term competitiveness may suffer seriously.
No one should deny workers the right to organize, bargain collectively, or seek fair compensation. Korea’s economic rise owes much to skilled workers, entrepreneurs, and engineers. Yet rights must be exercised with responsibility when their consequences threaten the public interest and national economic security.
The timing could not be more critical. Korea faces an unpredictable US trade policy, a volatile energy situation, intensifying US-China technology competition, and ongoing security threats on the Korean Peninsula. At this precarious moment, a strike in one of the country’s most strategic industries would send deeply negative signals to investors, global customers, and the public. Decisive, urgent action is required as this situation unfolds.
The economic risk is real. The Minister of Trade, Industry, and Resources warned that a strike by Samsung Union could cause up to $70 billion in damage and affect 1,500 subcontractors. KDI estimated that such a disruption could cut exports by 10 percent and lower the gross domestic product by 0.78 percent. This is not a typical labor dispute; it is a potential national economic emergency.
Policymakers must take two immediate actions. First, if a semiconductor strike is judged likely to seriously harm the national economy, emergency adjustment measures under the existing labor law should be declared without delay. Once invoked, industrial action can be suspended for 30 days while formal mediation proceeds. This is not labor suppression. It is a temporary safeguard to prevent irreversible damage while preserving room for negotiation.
Second, policymakers should seriously consider whether semiconductors require special legal protection, akin in principle, though not necessarily identical in scope, to that already applied to defense production. Such legislation would not abolish unions or collective bargaining. The key question is whether strikes that halt chip production should be restricted in the name of national security and economic stability. Korea already accepts that some industries are too vital to be interrupted. Defense production is one, and semiconductor production is another.
Tolstoy’s “How Much Land Does a Man Need?” reminds us that self-interest can have destructive consequences when it is not balanced with restraint and duty. A similar spirit is relevant here. To workers and union leaders at Samsung Electronics, it may be helpful to carefully weigh the broader impact of their actions. Semiconductor workers are one of Korea’s most strategically vital industries and already receive high compensation relative to many other sectors. Continued negotiations should consider not only fair compensation but also the broader national interest, public trust, and the country’s future. The semiconductor industry may appear highly profitable today, but its position can erode quickly through a single US trade policy shift, the imposition of steep tariffs, or a change in global market demand. Companies must be prepared for rainy days.
Korea’s leaders must act decisively and without delay. In the immediate term, invoke lawful emergency measures to prevent strike-related disruptions in semiconductor production. In the long term, enact targeted legal protections to permanently ensure continuous output in this critical sector. Safeguard national economic security — do not wait for a crisis. Now is the time for Korea to shield its most vital strategic industry before a labor dispute escalates into a national economic emergency.
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Man-Ki Kim
Man-Ki Kim is a professor at the KAIST Graduate School of Future Strategy, specializing in global public procurement, defense acquisition innovation and global strategic trends. He also serves as a senior adviser at Yulchon. The views expressed here are the writer’s own. -- Ed.
(Project Syndicate)
khnews@heraldcorp.com
