When South Korea’s most high-profile divorce case returned to court last month, the lawyers were arguing not just about the breakdown of a relationship, but also the exact date at which to value shares in one specific company.
The judges’ decision in Seoul could change the value of business tycoon Chey Tae-won’s assets by billions of dollars. The shares were in the holding company behind SK Hynix, the manufacturer of chips powering AI systems around the world.
South Korea is one of the world’s biggest makers of these high-value chips and the country is seeing an unprecedented wealth boom from their rise. From workers in tech firms collecting six-figure bonuses, to ordinary people seeing massive investment returns – all of it driving a surge in luxury spending.
But only a small slice of the population is cashing in, sparking a wider debate about who should have a share in the profits of the country’s most valuable industry. As South Korea grapples with widening inequality, calls are growing for some of the earnings – or the taxes they generate – to be spread more widely.
The huge wealth surge has been driven by two companies – Samsung Electronics and SK Hynix. The pair dominate the global supply of high-bandwidth memory, the specialised chips that AI systems need to run. Analysts project their combined operating profits could rise almost sevenfold this year.
Their success has pushed South Korea’s main stock index – the Kospi – to record highs.
The chipmakers have begun sharing those record profits with their staff on a scale the country has never seen. At Samsung, a memory-chip worker on a base salary of 80m won ($51,300) could receive bonuses close to 600m won ($384,900) this year, most of it in stock. That is roughly 17 times the average annual salary at a small South Korean firm.
SK Hynix paid its workers a bonus of nearly 3,000% of their monthly salary earlier this year. Based on forecast profits, next year’s payout is projected to be several times larger.
The signs of this flourishing wealth are dotted across the country. In satellite cities built around the chip factories south of Seoul luxury sales are surging.
In the first weeks of May, jewellery sales at one department store jumped 146%, while watch sales rose 85%. In Icheon, where SK Hynix has its main campus, imported car registrations surged 108% in February. Apartment prices near semiconductor company bus routes are rising at four times the wider Seoul average.
Not everyone benefiting from the AI boom works in a chip factory.
After watching financial videos online a few years ago, Brian Lee, a retiree in Seoul bought small amounts of SK Hynix and Samsung shares – and then forgot about them. His SK Hynix return is now 1,264%.
“This is the result of my hard work, plus luck,” he says. “I feel guilty,…
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