[The Editors' Verdict] We Must Protect Our Own Companies

The newly inaugurated Biden administration in the United States is more resolute toward China than the Trump administration. Citing semiconductors as the core of security and the economy, it even called foreign companies like Samsung and Taiwan's TSMC to meetings, urging them to increase investment in the U.S. American companies Intel and TSMC responded positively, accelerating the establishment of a U.S.-centered global semiconductor supply chain. It seems poised to swiftly shatter China's dream of semiconductor dominance. President Biden intervened to resolve the battery technology infringement dispute between LG Chem and SK Innovation. Rather than exercising a veto, the president acted as a mediator to find a solution aligned with U.S. national interests. Both LG and SK agreed to expand their investments in the U.S., significantly boosting America's competitiveness in secondary batteries. While the two companies were embroiled in conflict, Volkswagen, Germany's largest automaker, attracted a Swedish startup and declared self-reliance in secondary batteries. Moreover, it is attempting to reduce dependence on Korea by partnering with Chinese companies competing against Korean firms.

Not only the U.S. and China but also Europe are providing substantial subsidies and tax benefits for semiconductor production. The U.S. has even passed a bipartisan Semiconductor Support Act. President Moon Jae-in belatedly recognized the significant changes in the international situation and called business leaders to an expanded economic ministerial meeting. He emphasized that Korea should lead the global semiconductor supply chain and that companies and the government must act as one. However, the top decision-maker at Samsung, who should have taken the lead, was imprisoned, and the government gave no concrete directives, making the message sound hollow. The Moon administration took a bystander stance in the dispute between LG Chem and SK Innovation, allowing the U.S. government to resolve the conflict between Korean companies. While the government had previously labeled companies as corrupt and interfered in every matter, it limited itself to urging the parties to resolve this high-profile dispute. The fundamental cause of the conflict between the two companies lies in the shortage of secondary battery development personnel. Since the dispute arose from poaching key personnel, efforts must be made to increase workforce training and establish measures to address conflicts over talent poaching.

Korea's semiconductor industry makes an unusual request that would be unheard of in the U.S.: to dramatically increase semiconductor-related academic departments to nurture talent. In the U.S., close industry-academia cooperation and universities' autonomy in setting admission quotas make this unfamiliar. American education has been a success factor in leading advanced industries and widening the gap with other countries, while Korean government control over education has become an obstacle to the development and innovation diffusion of advanced industries. In the U.S., the know-how accumulated by technical personnel is considered company property, making it difficult to move to competitors. Non-compete clauses are included in contracts through labor-management agreements, requiring the original company's consent to move to a competitor. Although this clause restricts labor mobility and is controversial, courts allow it in a limited manner. In contrast, Korea considers such clauses illegal and has insufficient regulations regarding key personnel moving to competitors and technology leakage. This has escalated the LG-SK dispute and left Korea defenseless against the leakage of advanced technologies like semiconductors and secondary batteries to China and others.

The world is competing to secure advanced technology companies. Our companies must be protected by us. However, the Moon administration has been passive. Even now, by increasing and improving the training of technical personnel, excessive competition among domestic companies can be reduced, and legal measures should be established to resolve conflicts between labor law and civil law concerning personnel transfers and overseas leakage of core talent.

Kim Taegi, Professor of Economics, Dankook University