[Expectations for the 22nd National Assembly] Companies Say "K-Chips Act YES, Yellow Envelope Act NO"

Semiconductor and Device Industries "Need Cash Support"
Concerns Grow Over Labor-Management Relations After Samsung Electronics' First Union Strike Declaration

Companies urged the 22nd National Assembly to promptly advance the extension of the K-Chips Act (Amendment to the Restriction of Special Taxation Act) and to halt legislative work on the Yellow Vest Act (Amendment to Articles 2 and 3 of the Labor Union and Labor Relations Adjustment Act). Large-scale equipment industry companies, such as those in semiconductors, demanded not only the continuation of tax support that was underway in the 21st National Assembly but also cash support to increase research and development (R&D) and facility investments.

On the 29th, the last day of the 21st National Assembly's term, a banner congratulating the opening of the 22nd National Assembly is hung in the main building of the National Assembly. Photo by Kim Hyun-min kimhyun81@

The K-Chips Act provides a tax refund of 15-25% for facility investments in national strategic technologies such as semiconductors, displays, secondary batteries, and electric vehicles. The act, which was set to expire this year, was proposed to be extended for six years until 2030 in the 21st National Assembly but was discarded. This falls short of the industry's demand for 'cash' subsidies at the level of competing countries like the United States and Taiwan.

The Yellow Vest Act contains provisions to strengthen labor union strikes and dispute actions within workplaces, which companies strongly oppose. The Democratic Party included policies to strengthen union rights in their April 10 general election manifesto. They stated they would create a law to replace the existing widespread 'employment rules' with 'workplace agreements' made through labor-management consensus. Companies anticipate that the labor side will increase strikes and dispute activities under the pretext of strengthening the 'right to unionize.'

Concerns have sharply increased since the Samsung Electronics union declared the first strike in the company's 55-year history the day before. There is a sensed atmosphere of caution, fearing that legislative work on the Yellow Vest Act will accelerate after the opening of the 22nd National Assembly. A representative from a major corporation said, "Among labor issues, I want to inform the 22nd National Assembly that easing the introduction of bills related to union dispute activities, such as the Yellow Vest Act, is a more urgent task than industrial accident-related laws like the Serious Accident Punishment Act."

In corporate government relations communicating with the political sphere and government, voices of concern have also emerged about whether stable overseas investment can be made, considering the U.S. presidential election in November and wars in Eastern Europe and the Middle East this year.

This perception of reality is also reflected in a survey conducted by Asia Economy last month before and after the general election targeting 50 major domestic companies on their expectations for the 22nd National Assembly. Seventy-four percent of respondent companies cited 'improvement of regulations on corporate activities' as the most desired legislative agenda. Forty-two percent demanded 'expansion of tax credits and reduction of corporate tax.'

The message is that the National Assembly should support corporate management activities by stimulating investment and resolving various regulations such as labor. Fundamentally, the logic is that corporate growth leads to increased employment and investment, which in turn strengthens the national economy and stabilizes people's livelihoods.