▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.
[Key Issues Briefing]
■ Hopes for legislating chip sector's 52-hour workweek exemption dashed: President Lee Jae-myung has directed the Ministry of Employment and Labor to improve the existing presidential decree rather than enact a special law on mega-regional economic zones (such as chip clusters), abruptly halting the semiconductor industry's hopes for more flexible working hours. Ahn Dong-hyun, a professor of economics at Seoul National University, said, "The most important thing in business management is predictability, and there is no reason to add uncertainty through working-hour regulations."
■ Big Tech's AI funding moves beyond competition into war: Capital spending by the five companies — Microsoft, Alphabet, Amazon, Meta and Oracle — is projected to jump about sixfold as of January next year from 2023, while their free cash flow is forecast to swing from a surplus of $223.11 billion to a deficit of $2.87 billion. Nvidia CEO Jensen Huang said, "What is holding back growth is not demand but working capital," signaling that the aggressive investment stance will continue.
■ HD Hyundai becomes first Korean company to build a U.S. shipyard: HD Hyundai has established a joint venture called HD Kiewit Shipbuilding with Kiewit, the largest construction and engineering company in the United States, and will build a smart shipyard with groundbreaking set for next year and full operations targeted for 2029. HD Hyundai will hold at least a 51% stake and lead management, and the company expects to hire about 3,000 local workers once the yard is fully operational.
[News of Interest to New Employees]
1. Chip Sector's 52-Hour Workweek Exemption in Doubt as Industry Reels From Loss of Legislative Path
Key points: Business circles that had counted on legislation were thrown into confusion after President Lee Jae-myung asked the Ministry of Employment and Labor to improve the existing presidential decree instead of enacting a law granting labor exceptions, such as an exemption from the 52-hour workweek, under a special act on mega-regional economic zones. Business groups argue that the current special extended-work system requires worker consent as well as an application to and approval from administrative agencies, making it ineffective in urgent research and development situations. An official in the semiconductor industry said, "It is routine to suddenly run into an unexpected obstacle one day and work through the night for several days to solve the problem," adding that flexible working hours need to be guaranteed by law. Ahn Dong-hyun, a professor of economics at Seoul National University, stressed, "The most important thing in business management is predictability, and there is no reason to add uncertainty through working-hour regulations."
Key points: Capital spending by the five companies — Microsoft, Alphabet, Amazon, Meta and Oracle — is projected at $945.55 billion as of January next year, up about sixfold from 2023, while their free cash flow over the same period is forecast to swing from a surplus of $223.11 billion to a deficit of $2.87 billion. Right after Meta disclosed $825 billion worth of AI infrastructure investment commitments, its credit default swap premium jumped 8.9 basis points from the previous session to 119.3 basis points, heightening caution in the market. OpenAI is expected to push ahead with an initial public offering next month even as it lowered its valuation target to $1.25 trillion from $1.4 trillion. Nvidia CEO Jensen Huang said, "What is holding back growth is not demand but working capital," signaling that the aggressive investment stance will continue.
Key points: The average annual welfare points allocated per person to 3,772 employees at Kangwon Land's headquarters amount to 1.7 million won, while employees of its subsidiary High1 Partners receive only 550,000 won. High1 Partners was set up in 2019 to convert subcontractor workers into permanent employees, but the 550,000 won level agreed at the time of conversion has remained unchanged for six years. Koo Ja-keun, a lawmaker of the People Power Party, called for substantive measures to improve working conditions, asking, "Surely the agreement made at the time of the conversion to permanent employment is not meant to be a lifelong shackle." Critics added that improvements in line with the purpose of Kangwon Land's establishment are needed, given that 324 of High1 Partners' 448 total employees, or 72.3%, live in former coal mining regions.
4. HD Hyundai to Build Smart Shipyard in the U.S.
Key points: HD Hyundai signed a contract on the 22nd in Houston, Texas, with Kiewit, the largest construction and engineering company in the United States, to establish a shipbuilding joint venture called HD Kiewit Shipbuilding. HD Hyundai will secure at least a 51% stake and lead management under the structure, and it is reviewing multiple candidate sites including western California and southern Texas, aiming to select a location this year, break ground next year and begin full operations in 2029. It is the first time a Korean company has directly built a shipyard in the United States, and the company expects to hire about 3,000 local workers once the yard is fully operational. HD Kiewit Shipbuilding is also preparing to win orders for U.S. Navy logistics support ships and commercial vessels, to run a side business manufacturing and supplying ship blocks and modules to U.S. shipyards, and to enter the port infrastructure business.
…