[News] South Korea’s Labor Regulations May Weaken its Semiconductor Competitiveness

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According to a report from Business Korea, South Korea’s semiconductor industry is under growing pressure from the intense R&D efforts of Taiwan, Japan, and the U.S., as South Korean engineers work fewer hours compared to their global counterparts, due to current labor regulations.

The report pointed out that in order to keep the competiveness of companies like Samsung Electronics and SK Hynix, reforms in labor market flexibility are necessary.

The report, citing data from the semiconductor industry and the Ministry of Employment and Labor in South Korea, noted that the average monthly working hours for employees in South Korean businesses with one or more full-time workers is 156.2 hours. This is fewer than the 180.3 hours worked by Taiwanese employees as of August 2024.

According to the data, the report emphasized that compared to Taiwanese workers, South Korean workers work three days less per month. The report highlighted that the shorter working hours of South Korean employees could weaken the country’s R&D competitiveness, as companies like Taiwan’s TSMC or the U.S.’s NVIDIA expect employees to work around the clock when necessary.

The report noted that engineers in South Korea face legal restrictions preventing them from working beyond a set time. These reduced working hours, imposed by labor regulations, could threaten the competitiveness of South Korean tech companies. The report also highlighted that, although South Korea currently holds a fragile lead in the memory semiconductor sector, this position is at risk of being overtaken.

According to the report, South Korea’s strict labor regulations, including a 52-hour workweek limit introduced in 2018, were intended to promote work-life balance. However, there is increasing concern that these regulations may impede economic growth and innovation, particularly in high-tech sectors such as semiconductors.

(Photo credit: Samsung)