South Korea’s AI chip boom separates the haves from the have-mores

{"text":[[{"start":8.2,"text":"In the message group he shares with university friends, Samsung Electronics memory chip engineer Kim Jin-su says one topic has started coming up: how much he makes."}],[{"start":18.299999999999997,"text":"“Don’t you earn more than all the other five of us put together?” goes one recent comment. “Must be nice making so much money,” says another. "}],[{"start":26.849999999999998,"text":"Kim says the remarks are made with a laugh and “a little bit of self-deprecation”. But for many in South Korea, the sudden massive earnings potential of those making sought-after memory chips — who are in line for huge bonuses as they share the bumper profits accruing to national chip champions Samsung and SK Hynix — is becoming a source of division and even resentment."}],[{"start":49.05,"text":"“I recently met up with a friend who is a professor. We talked about Samsung and SK Hynix bonuses, and lamented studying so hard to be model students back in school,” says a civil servant in Sejong, about 110km from Seoul. “Seeing people getting such massive payouts just because they were in the right place at the right time is a bit of a slap to the face.”"}],[{"start":74.65,"text":"For decades, South Korean society’s hierarchy of success was stable. The brightest students aimed for careers in professions such as medicine, law and dentistry. Such jobs were hard to attain but guaranteed high, stable incomes and conferred prestige and favourable marriage prospects."}],[{"start":null,"text":"

"}],[{"start":93,"text":"But an extraordinary boom in artificial intelligence is beginning to change that. Soaring global demand for high-bandwidth memory chips used in AI systems has propelled SK Hynix and Samsung Electronics to record earnings. This week Samsung announced quarterly operating profit of Won89.4tn ($59.7bn)."}],[{"start":113.75,"text":"The windfall is being shared with employees. Last September, SK Hynix agreed to pay workers 10 per cent of annual operating profits for a period of 10 years. Samsung followed with a similar arrangement in May after its union threatened strike action."}],[{"start":130.65,"text":"With both firms expected to earn hundreds of billions of dollars this year, average bonus payouts per memory chip worker could reach about Won600mn ($400,000) at Samsung and even more at SK Hynix."}],[{"start":145.05,"text":"Such amounts are staggering in a country where the average worker earns Won50.6mn per year, according to Korea Enterprises Federation data. The Bank of Korea has warned of potential inflationary pressure as a result, and towns where many semiconductor workers live are undergoing property price jumps."}],[{"start":164.70000000000002,"text":"Competition is intensifying for places at universities offering semiconductor “contract” programmes that guarantee jobs at Samsung Electronics or SK Hynix upon graduation. Admission scores required for some such courses now exceed the average for natural sciences at Seoul National University, the country’s top-ranked university, and are just below those needed for medicine. "}],[{"start":null,"text":""}],[{"start":186.75000000000003,"text":"“Young people are all interested in the chip industry these days,” said the mother of a daughter approaching her final year of high school. “There’s just so much money in it.”"}],[{"start":197.00000000000003,"text":"The boom is also reshaping Korea’s marriage market. Matchmaking agencies, which are known for using meticulously harsh metrics to rank clients, are now giving higher points to chip workers."}],[{"start":208.70000000000002,"text":"Sunoo, one such agency, has recently made what its chief executive Lee Woong-jin calls an “exceptional” upgrade to Samsung Electronics employees’ “spousal job index”, placing them alongside lawyers."}],[{"start":221.20000000000002,"text":"“As the pay of semiconductor workers, especially those at Samsung and Hynix, has increased, their popularity as potential spouses has risen,” said Lee."}],[{"start":232.00000000000003,"text":"Less tangible, but no less significant, are the changes the new bonus culture is bringing to what Koreans think about fairness and what constitutes a successful life. The bonuses promised to chipmaking employees are highlighting what Koreans know as sangdaejeok baktalgam or “relative deprivation”: a sense of injustice that comes from being worse off than those of roughly equal status."}],[{"start":255.55000000000004,"text":"“What we’re seeing isn’t simply inequality,” said Kwon Seok-joon, a semiconductor expert and lecturer at Sungkyungkwan University in Seoul. “It’s not ‘a billionaire has more money than me’. It’s ‘my classmate on the same track now earns hundreds of millions [of won] more.’ Among near-peers, that’s far more corrosive.” "}],[{"start":274.25000000000006,"text":"Similar tensions even exist within companies. Those in Samsung’s hugely profitable memory division are set to receive far larger payouts than colleagues in other parts of the company."}],[{"start":285.90000000000003,"text":"Whang Sang-min, a psychologist, said many Koreans derive their sense of success from how they compare with others."}],[{"start":292.75000000000006,"text":"“Most people do not ask, ‘What kind of life should I lead?’ They simply ask what is the ‘best’ life or the most preferred lifestyle,” he said. “Once you set up that external standard, everybody tries to follow that trend.”"}],[{"start":305.65000000000003,"text":"As a result, he argues, the success of a classmate or neighbour can make one feel a failure."}],[{"start":311.55,"text":"The recent spread of profit-sharing demands to non-semiconductor firms such as internet conglomerate Kakao and carmaker Hyundai Motor reflected this, said Whang. While workers had not suffered any objective loss, the success of comparable employees elsewhere led them to feel they had been left behind."}],[{"start":329.8,"text":"“They fear they were harmed . . . even though there was no harm at all,” he said. “This is the real essence of relative deprivation.”  "}],[{"start":338.75,"text":"Another civil servant, who had to pass a rigorous exam to enter what has long been seen as a prestigious profession, said that seeing chip engineers receive bonuses worth more than a decade of her salary had left her questioning her own choices."}],[{"start":351.95,"text":"“I try to stay positive,” she said. “But I’m jealous. It does make me wonder what I’m working for.”"}],[{"start":358.59999999999997,"text":"Aware of the semiconductor industry’s notorious cyclicality, even people like Kim the memory chip engineer are not convinced that their new place near the top of Korea’s hierarchy of success will endure."}],[{"start":370.49999999999994,"text":"“People say, ‘this time it’s different’. But even though the rapid growth of AI led to an unprecedented memory chip shortage, I still believe that a down cycle will inevitably occur,” he said."}],[{"start":390.2,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1783578506_4084.mp3"}