Minister Kim Junggwan: "52-Hour Workweek Needs Overhaul...The Will to Work Must Not Be Blocked"

Kwanhun Club Invitational Forum
"Competitiveness Hampered from R&D to Startups"
Minister Stresses the Need for Reforming Working Hour Regulations
"No Sharing of Semiconductor Profits"
Firm Stance Against Profit-Sharing Proposal
"The Coupang

Yonhap News Agency

Minister of Trade, Industry and Energy Kim Junggwan has stated that the 52-hour workweek in the research and development (R&D) sector should be revised to strengthen the competitiveness of the semiconductor industry. Minister Kim emphasized the need to improve work hour regulations, saying, "Rules should not stand in the way of people who are willing to work hard and achieve results." On the topic of sharing the semiconductor industry’s achievements with society, he drew a clear line, stating, "We should not try to divide up the money made from semiconductors." Minister Kim repeatedly stressed the importance of focusing policy capabilities on speed and investment in order to maintain competitiveness in semiconductors amid fierce competition from China.

"Willingness to Work Should Not Be Blocked"... Need to Amend the 52-Hour Workweek

At a Kwanhun Club forum held at the Korea Press Center in Jung-gu, Seoul on August 6, Minister Kim said, "The 52-hour workweek is not just an issue for the semiconductor industry, but is related to the competitiveness of all industries," adding, "While a basic regulatory framework is necessary, it should not suppress the willingness to work."

The debate over the 52-hour workweek in the semiconductor industry has centered on whether work hour regulations should be relaxed for R&D personnel, making it a key issue for over a year. The industry has argued that since process development and product verification in semiconductors inevitably require intensive work hours at the end of projects, exceptions should be made for R&D personnel. In contrast, labor unions have opposed this, claiming that it would institutionalize long working hours. As a result, the special semiconductor act passed by the National Assembly in January did not include a provision for an 'exception from the 52-hour workweek for R&D.' Since then, as the government has selected semiconductors, artificial intelligence (AI), and biotech as the three major megaprojects and is accelerating national-level development, discussions around improving work hour regulations to strengthen the competitiveness of advanced industries are gaining renewed traction.

Minister Kim underscored the need for changes to the 52-hour workweek by sharing an anecdote he heard directly from a Chinese company. He said, "An official from an IT company in Chongqing, China, told me that when they tried to introduce the '996' system (work from 9 a.m. to 9 p.m., six days a week), workers asked for even longer hours, arguing 'how can we compete with other companies otherwise?'" He explained, "Competition in China is far more intense than we realize. The perception is widespread among workers that if a company loses competitiveness, jobs and wages cannot be protected, as this example shows."

He reiterated, "Rules should not block the will of those who want to work hard and achieve success," and added, "We need to reconsider work hour regulations not only for R&D, but also for the broader advanced industry sector, including startups."

"No Dividing up Semiconductor Profits"... Draws Line on Profit-Sharing

Minister Kim took a firm stance on the debate over the sharing of profits in the semiconductor industry. He said, "I sincerely hope people stop thinking about dividing up money earned from semiconductors," adding, "Semiconductors are an industry that will require much more investment in the future than the money currently being earned." He went on, "Semiconductors are not just about Samsung or SK, but are a strategic asset for the Republic of Korea," and emphasized, "Profits earned from the current boom should be used for future investments."

He said, "When a company earns 200 trillion won, it must invest several tens of trillions more to build essential infrastructure like electricity and water. If this does not happen, the market will no longer be ours."

Regarding performance bonuses linked to operating profit, which is being proposed by labor unions, Minister Kim made his opposition clear: "The owners of a company are shareholders and investors," he stressed, "Neither executives nor workers should be prioritized above shareholders and investors, and I oppose performance bonuses being tied to operating profit." He added, "If such a system is to be implemented, at the very least the consent of shareholders through a general meeting is needed."

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"Already Late"... 'Race Against Time' for Semiconductor Cluster

Regarding the "race against time" debate surrounding the government’s plan to establish a semiconductor cluster in Honam, Minister Kim reiterated the necessity of pushing forward, saying, "The semiconductor industry is not a matter of choice, but a survival race in which both the nation and companies must run together." He explained that, even if the construction of the Yongin Semiconductor Cluster is sped up, it would be difficult to meet mid- to long-term demand, making it inevitable to secure new production bases.

He said, "The semiconductor market is expected to grow from its current size of around 200 billion dollars to a 1 trillion dollar market in five years," and explained, "The reason for this race against time is that we need to secure a leading position as quickly as possible when the market expands."

Minister Kim expressed a deep sense of urgency about the speed of Chinese investment. He said, "The U.S. and China are both fast, but especially China’s speed is beyond what we can imagine," adding, "If we miss this timing, our approximately 65% market share in the memory sector, as well as the significance of semiconductors as a strategic industry, could be seriously diminished." He continued, "This is a race against time not only for companies, but for the nation as well. I believe the current pace is already slow; if possible, we should move even faster."

He said, "Even now, we are continually accelerating the construction schedule for the Yongin Semiconductor Cluster, and SK hynix is also working to shorten its planned timeline by several years. The government’s position is to accelerate the process even further wherever possible." However, he explained, "The fabs currently planned for Yongin alone will not be enough to meet future increases in semiconductor demand, which is why we are considering additional production sites."

Minister Kim pointed to electricity and water supply as the most critical reasons why additional production bases are needed. He said, "The biggest Achilles’ heel of the semiconductor industry is electricity and water," and added, "One reason Yongin cannot accelerate further is ultimately the electricity supply." He continued, "The greater Seoul area faces real limitations in supplying additional large-scale electricity, and the construction of power grids is further complicated by local residents' acceptance issues. For this reason, although we're trying to speed up progress in Yongin as much as possible, we have no choice but to consider new production bases with relatively better power conditions."

"The US-ROK Alliance Will Not Be Shaken Over Coupang Alone"

On the issue of Coupang, which has emerged as a Korea-US trade issue, Minister Kim warned against overinterpretation, saying, "The Korea-US alliance is not so weak that it can be shaken by a single Coupang issue." He added, "Some try to link the Coupang issue to current trade disputes, but at its core, this is a much deeper problem. Our government has worked for a long time to solve this, and we see it as an issue that will take time to resolve."

He continued, "Within the US administration and some in political circles, there is a misunderstanding that Coupang is reducing the US trade deficit with Korea by importing a lot of US products. That is not true." He explained, "The real issue here is the leakage of personal information, and we are working to bridge the gap in perceptions by continuously explaining this to the US side." Minister Kim also stated, "If the Korean government had discriminated against Coupang, the company would not have been able to grow so quickly. This incident highlights the need to rebalance regulations, such as those on large retailers, to reflect the online-focused retail environment."

Regarding investment projects involving the US, Minister Kim said, "Both countries are closely negotiating projects of mutual benefit," but did not disclose specifics. On Section 301 forced labor tariffs under US trade law, he said, "We are keeping negotiations within a range that does not exceed 15% overall, and both countries are in agreement on this." He stated, "Our goal is not to strictly stay below 15%, but to ensure that we are not at a disadvantage compared to competing countries," and emphasized, "We are particularly mindful of competition with Japan."

On joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Minister Kim said, "It would actually be unusual for a trading nation like Korea not to join CPTPP," but added, "We need to communicate thoroughly and prepare countermeasures in close consultation with the agricultural, livestock, and fisheries industries as we proceed."

This content was produced with the assistance of AI translation services.