KEF Says Strikes Demanding Profit-Sharing Are Illegal, Curbing Bonus Spread

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an AI-based personalized news recommendation and summarization service developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.

1. KEF: "Use of Operating Profit Is a Management Decision… Strikes for Profit-Sharing Are Illegal"

- Key Summary: The Korea Enterprises Federation officially recommended that all member companies refuse collective bargaining over demands for operating profit-linked performance bonuses. As the agreements at Samsung Electronics and SK hynix to pay performance bonuses equivalent to 10.5% and 10% of operating profit, respectively, have set a precedent, demands have rapidly spread to Hyundai Motor, Kia, and Kakao. The KEF made clear that strikes aimed at profit-sharing could constitute illegal industrial action. The business community's view that pre-allocating operating profit without shareholder approval could amount to illegal dividends bypassing commercial law procedures served as the backdrop. If performance bonuses are recognized as wages, this could expand the scope of ordinary wage calculations and trigger a chain reaction of severance pay increases. The business community sees the KEF's advisory as a turning point for defending its cost structure following the implementation of the Yellow Envelope Act.

2. Jensen Huang to Cooperate with Korea's Top 4 Conglomerates on AI Chips and Robots… Series of 'Buddy Meetings' This Week

- Key Summary: Nvidia will hold its first 'Korea Partner Night' in Taipei on June 1, gathering executives from major companies including Samsung Electronics, SK hynix, Hyundai Motor, LG Electronics, Naver Cloud, and Doosan (000150.KS), formalizing its AI alliance with Korea. CEO Jensen Huang is expected to visit Korea around June 5 after Computex and meet successively with Chairmen Tae-won Choi, Euisun Chung, and Kwang-mo Koo, as well as Chairman Lee Hae-jin, to expand cooperation on HBM supply and physical AI platforms. Samsung Electronics is focusing on securing customers for HBM4E, which it shipped as samples for the first time in the world, while SK is concentrating on strengthening its AI chip triangular alliance including TSMC. CEO Huang projected the new CPU business market at $200 billion (about 300 trillion won), and chip competition with Intel and AMD is expected to develop into an all-out war at Computex.

3. TSMC and Partners a 30-Minute Walk Apart… "Problems Solved Within Half a Day"

- Key Summary: Taiwan's Hsinchu Science Park concentrates around 900 semiconductor companies and institutions and 170,000 people on a 15-square-kilometer site, creating a tight ecosystem where TSMC and MediaTek are within a 30-minute walk. The entire supply chain—foundries, fabless firms, packaging and testing, and materials, parts, and equipment—is contained within one perimeter, allowing solutions to be found with key partners within half a day when technical problems arise. By contrast, Korea's industrial clusters are dispersed across Pyeongtaek, Cheongju, and Yongin, with headquarters and universities in Seoul and research institutions in Daejeon. Taiwan's economic growth forecast for this year is 9.6%, far exceeding Korea's 2.6%, and Nvidia has decided to increase its annual investment in Taiwan to $150 billion, reaffirming the competitiveness of the concentrated ecosystem.

4. Won-Dollar '24-Hour Trading'… Volatility Burden Likely to Grow

- Key Summary: The Seoul foreign exchange market will transition to a 24-hour trading system from 6 a.m. Monday to 6 a.m. Saturday, beginning July 6. The full overhaul, the first in about 40 years, aims to improve global investors' access to the won market and lay the groundwork for inclusion in the MSCI Developed Markets Index. With volatility already high—the won-dollar exchange rate closed in the 1,500-won range on 22 trading days this year—concerns are being raised that liquidity shortages during overnight hours could amplify external shocks into sharp exchange rate swings. However, the Korea Capital Market Institute analyzed that no significant evidence of expanded volatility was confirmed following last year's extension of trading hours, and the Bank of Korea is expected to respond actively to speculative concentration as before.

5. Household Debt at 80% of GDP, Could Be Reached Within This Year on Semiconductor Boom

- Key Summary: With this year's GDP deflator likely to exceed 10%—the highest since 1990 (10.1%) in 36 years—on the back of strong semiconductor exports and a surging exchange rate, the government's 2030 target of a household debt-to-GDP ratio of 80% is now expected to be achieved four years ahead of schedule, within this year. Applying the household loan total volume regulation (1.5%), the year-end ratio is forecast at 79.4%, down about 9 percentage points from 88.6% at the end of last year. As the decline reflects nominal GDP expansion rather than debt reduction, observers note that the burden of inflation and rate hikes could be concentrated on vulnerable groups. A 0.25 percentage point rise in lending rates would increase annual interest burdens for the self-employed by 1.8 trillion won, and if the Bank of Korea raises its base rate in the second half, the upper limit of mortgage rates could approach 8%.

6. Hanwha Ocean (042660.KS) Heats Up Canada's Largest Defense Expo, Goes All-Out for 60 Trillion Won Submarine Order

- Key Summary: Hanwha Ocean intensively promoted the performance of the KSS-III submarine and its 'Pan-Canada Economic Strategy' at 'CANSEC 2026,' Canada's largest defense exhibition, mounting a final all-out push for the up to 60 trillion won Canadian Patrol Submarine Project (CPSP). The KSS-III is the world's first diesel submarine to apply both an Air-Independent Propulsion (AIP) system and lithium-ion batteries simultaneously. If the Hanwha Ocean–HD Hyundai Heavy Industries (329180.KS) one-team is selected, it is expected to create more than 22,500 jobs annually and add $94 billion to Canada's GDP. The final competitor is Germany's ThyssenKrupp Marine Systems (TKMS), with results expected in June. With Nova Scotia's Minister of Growth and Development expressing intent for provincial-level cooperation on site, the Korean one-team's persuasion efforts targeting local political and business circles have reached their peak.