SK Hynix paid its workers a bonus of nearly 3,000% of their monthly salary this year. At Samsung, a memory-chip worker on a base salary of 80 million won ($51,300) could receive bonuses close to 600 million won ($384,900) — roughly 17 times the average annual salary at a small South Korean firm. Meanwhile, nearly a million small businesses closed in 2025, manufacturing employment has fallen year on year for nearly two years, and the income gap between the richest and poorest households hit a six-year high.
🔍 THE BOTTOM LINE
South Korea’s AI chip boom is generating unprecedented wealth — but only for a narrow slice of the population. Two companies (Samsung and SK Hynix) make up more than 50% of the Kospi index. Strip them out and the rest of the economy is barely moving. The question now dominating Korean politics: who owns the profits of the AI revolution, and what happens when the answer is “not you”?
The Numbers That Break the Narrative
The Guardian’s deep dive into Korea’s AI wealth boom lays out a story that doesn’t fit the standard “AI lifts all boats” framing. Samsung and SK Hynix 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.
The signs of wealth are everywhere around the chip factory cities. Jewellery sales at one department store jumped 146% in the first weeks of May. 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.
Brian Lee, a retiree in Seoul, bought small amounts of SK Hynix and Samsung shares after watching financial videos online. His SK Hynix return is now 1,264%. “This is the result of my hard work, plus luck,” he says. “I feel guilty, and at the same time, even though I have yet to cash it out, I tend to spend more.”
The Other Korea
The wealth boom is invisible to most of the country. South Korea has one of the highest rates of elderly poverty in the developed world. More Koreans feel their living standards have worsened than improved, despite the wealth piling up in chip-factory satellite cities. Manufacturing employment has fallen year on year for nearly two years. Nearly a million small businesses closed in 2025, with many owners left carrying huge debts.
“Everyone is talking about the boom, but most Koreans can’t feel it,” says Kyusuk Cho, a graduate student in Seoul. “Life is getting more expensive and jobs are harder to find.”
The structural problem is concentration. Two companies account for over half the Kospi index. The rest of the Korean stock market — and by extension, the broader economy — is essentially flat. When a country’s entire economic narrative depends on two firms making the same type of chip, the wealth isn’t trickling down. It’s pooling at the top.
The Political Explosion
President Lee Jae-myung’s chief policy adviser floated what he called a “citizen dividend” in May, arguing the wealth rested on foundations built by all Koreans over half a century of state investment in research and industrial policy. The proposal was immediately attacked by opposition politicians as akin to communism. The presidential office distanced itself from the plan.
The labour unrest is equally sharp. Samsung’s largest union nearly brought production to a halt in May, demanding a guaranteed share of profits, before a last-minute deal averted a strike. But the deal upset workers in Samsung’s phone and appliance divisions, who were set to receive only a fraction of what those in chip making got — for the same company, in the same year.
Kim Yong-jin, professor of business administration at Sogang University, frames it as a structural question: “Over the years, the semiconductor industry benefited enormously from government support. So they have to think about society itself.” The gains, he argues, should be shared between those who invested, those who worked, and the society that made it possible. “We need a consensus on how to share these profits,” he says. “That is the most important part.”
NZ Angle
New Zealand doesn’t have a Samsung or an SK Hynix. But the sovereign AI debate hitting Korea — who owns the infrastructure, who profits from the compute, who pays for the energy — is the same debate arriving on NZ shores. The NZ Super Fund’s $93 billion could be building AI infrastructure rather than just buying overseas tech stocks, and the Korean example shows what happens when a country does build that infrastructure: enormous wealth, enormous concentration, and a political fight over who gets what.
Korea’s $1 trillion AI megaproject push was supposed to be the model for how a mid-sized country can ride the AI wave. The wealth-divide data suggests the model works — if you’re inside the chip foundry. The question for NZ is whether sovereign AI investment can be structured to avoid the concentration Korea is now struggling with, or whether concentration is simply what compute economics produces.
❓ FAQ
How big are the bonuses at Korean chip firms? SK Hynix paid workers a bonus of nearly 3,000% of monthly salary. Samsung memory workers on a $51,300 base could receive $384,900 in bonuses, mostly in stock. Next year’s projected payout is several times larger based on forecast profits.
Why is the rest of Korea’s economy stagnating? Manufacturing employment has fallen year on year for nearly two years. Nearly a million small businesses closed in 2025. Samsung and SK Hynix make up over 50% of the Kospi index — strip them out and the rest of the market is flat.
What is the “citizen dividend” proposal? President Lee’s policy adviser proposed channelling surplus tax revenues from the chip boom back to the public, arguing the industry’s success was built on decades of state investment. It was attacked as communism and the presidential office walked it back.
Does this matter outside Korea? Yes. Korea is the clearest case study of what happens when AI infrastructure wealth concentrates in two companies. Countries building sovereign AI capacity — including NZ — face the same structural question of how to distribute the gains.
🔍 THE BOTTOM LINE
South Korea is the canary in the AI economy’s coal mine. The chips work. The wealth is real. But the distribution mechanism is broken, and no one — not the government, not the opposition, not the unions, not the academics — has a working answer for how to fix it. When two companies generate nearly all the growth and the rest of the economy stagnates, “AI boom” becomes a political problem, not an economic victory. The Kiwi lesson: build the infrastructure, but build the distribution model first.
