‘No time to divide chip profits’: Industry minister

South Korea should resist calls to redistribute the record profits of Samsung Electronics and SK hynix beyond the taxes they already pay, Industry Minister Kim Jung-kwan said Thursday, warning that Korea could begin losing its grip on the global memory market within a year unless investment accelerates.

“The government’s share should end with taxes,” Kim said at a debate hosted by the Kwanhun Club, a senior journalists’ association, in Seoul. “Semiconductors are the only strategic asset Korea has. This is not the time to divide the profits.”

Kim said chipmakers urgently need to reinvest their earnings in new factories, advanced equipment and next-generation research. Even greater government support would be insufficient given the scale and speed of global competition, he added.

“People say semiconductor companies are making a lot of money, but that can disappear in an instant,” Kim said. “A single fab requires 150 trillion won ($105.8 billion) to 200 trillion won. The 800 trillion won project planned for the Honam region is essentially the cost of building four fabs, with that capital tied up for years.”

Kim voiced concern over intensifying competition from the United States and China, both of which are pouring massive resources into semiconductors and artificial intelligence. He identified China as the more immediate threat.

Chinese chipmakers remain behind their Korean rivals, but state-backed investment and the reported development of a domestic immersion deep-ultraviolet lithography system suggest the technology gap is narrowing faster than expected, he said.

“The DUV development was shocking,” Kim said. “My sense is that China is steadily advancing across semiconductor materials, components and equipment, step by step.”

Turning to trade negotiations with Washington, Kim said Seoul’s goal goes beyond securing a headline tariff rate of 15 percent.

The priority is ensuring Korean companies are not placed at a disadvantage to major competitors, including Japanese companies, he said. The actual burden of tariffs also depends on product coverage, exemptions and other conditions.

Kim also addressed concerns in the United States over Korea’s response to Coupang following the e-commerce company’s personal data breach.

He acknowledged differences in tone between US political circles and trade officials but dismissed suggestions that the dispute could damage bilateral relations.

“It is not an issue serious enough to shake the Korea-US alliance,” Kim said.

Kim also discussed nuclear power, electricity grids, labor policy and industrial restructuring during the debate.

The Kwanhun Club, an association of senior journalists founded in Seoul in 1957, regularly holds debates with prominent government, political and business figures.

Kim was the first industry minister to appear at the forum in 28 years, following then-Industry and Resources Minister Park Tae-young during the 1998 Asian financial crisis.