Chey Tae-won, chair of the Korea Chamber of Commerce and Industry and chair of SK Group, criticized that Korea's current institutions and policies are not helping the growth of corporations. He warned that Korea runs on the two pillars of capitalism and democracy, but sometimes forgets capitalism, and that if corporations stop growing, even democracy could run into trouble.
On the 15th, ahead of the opening of the 49th KORCHAM Summer Forum held at the Shilla Jeju, Chey said at a press briefing, "We still have the same institutions from the past era of high growth," and added, "We have now entered an era of low growth, yet we only say growth is necessary, while there are not many institutions that actually help corporations that are growing."
He hinted at the view that the current system is hobbling corporations that are trying to grow. In the past, if exports were increased through trade, various benefits such as interest reductions and the provision of subsidies were given, allowing corporations to grow quickly, but now such incentives have almost disappeared and, instead, the burdens are increasing.
Chey asked rhetorically, "If you double sales in a year and increase employment, do you get an award, do you get support and subsidies?" He went on, "You have to give incentives for corporations to grow, but our system is stuck in frames like 'small corporations must all get better no matter what,' 'because they are poor, we must give them something no matter what,' and 'because they are rich, we must keep raising taxes.'"
He also offered a sharp warning that if the growth engine shuts down, the overall social system will face major problems.
Chey said, "Korea's political system runs on democracy and its economic system on capitalism, but people sometimes completely forget capitalism," adding, "the two wheels are not working properly as they did in the past." He also said, "Growth is stalled because one wheel is out, so even democracy is having problems," and added, "If we achieve growth, we can solve problems, but that wheel is shutting down."
He reiterated, "To make the two wheels work properly, we need to return to policies that expand growth," and added, "Only with growth can distribution issues be resolved. I don't think growth damages democracy or worsens other distribution problems."
◇ "We didn't know we would make this much money… if it breaks stakeholder happiness, the bonus system should be changed"
At the briefing, Chey also said a rethink is needed on SK hynix's bonus payment framework. As SK hynix implements a "10% of operating profit bonus with no cap on the payout amount," controversy has recently been spreading in the business community.
He said, "No one would have known we would make money like this," adding, "That's probably why (the bonus system) was designed that way, and when you create a system, you can run into strange situations."
Chey said, "SK's management philosophy includes the phrase 'the company's purpose is to serve the happiness of its members,' but it comes with the caveat that stakeholders—shareholders, employees, customers, and partners—must be happy together," and emphasized, "If members' happiness is deemed to break stakeholders' happiness, we should step in and change it."
He added, "We even discussed that if it causes problems for our stakeholders, we don't think we can sustain this (SK hynix's bonus system)," and said, "Please watch a little longer."
◇ "Semiconductor demand is rising exponentially… to the point you could call it 'total chaos'"
He also predicted that semiconductor demand will continue to soar. On the 17th during a summer forum talk on artificial intelligence (AI), when asked about SK hynix's stock price, Chey advised, "There's a strong chance memory demand will keep increasing, so keep holding the stock."
He said, "Semiconductor demand is continually, exponentially increasing. Looking at it now, next year's demand will increase at least 60–100% compared to this year." He added, "As for supply, no company has much additional supply next year. The gap will inevitably widen much more than this year, and I don't know if we should even use the term 'total chaos.'"
He also said semiconductor production facilities need to keep being built, but he was cautious about whether the timetable can be moved up sharply. SK said last month that it would build a large-scale semiconductor industrial complex in Honam following the Yongin semiconductor cluster. Recently, U.S. Commerce Secretary Howard Lutnick also argued that a semiconductor plant should be built in the United States.
Chey said, "We need to expand semiconductor plants quickly, and the scale must be very large," adding, "The current situation is that we are trying to build them everywhere we can." However, he drew a line, saying, "Bringing forward a plan to complete a plant by '45 by 12 years is not something easy for us to digest internally."
He said, "Yongin still doesn't have water and electricity fully in place," adding, "These days there are also serious industrial accident issues involving equipment and construction. We can't rush and end up causing another accident."
Meanwhile, Chey also hinted that serving as the head of a business lobby will be his last role as chair of the Korea Chamber of Commerce and Industry. Recently, some speculated that when Chey's term as KORCHAM chair ends in March next year, he would lead The Federation of Korean Industries.
He said, "From now on, the work I need to focus on will carry more weight than how to run a business association," adding, "You won't hear my voice much after next year."