In South Korea, it is rare for employee bonuses to be so high that they attract the attention of the central bank. However, a semiconductor giant in South Korea recently distributed bonuses worth tens of millions of Korean won to its employees, prompting a warning from the central bank about upward pressure on inflation.
The Bank of Korea stated in a report on June 17 that this year’s inflation is mainly being driven by the rise in energy prices due to the conflict in Iran. The report also added that even if the conflict subsides, inflationary pressures could gradually intensify with improvements in income levels and widespread wage growth.
Of particular note, the Bank of Korea also pointed out that the significant performance bonuses recently given out by some large tech companies may lead to broader wage growth, thereby further elevating inflation. The Bank of Korea predicts that the inflation rate in 2026 will reach 2.7%, already exceeding the target level of 2%.
According to reports from the South Korean media, employees of domestic tech companies, especially the semiconductor giants SK Hynix and Samsung Electronics, have recently received substantial bonuses.
While the exact amounts have not been disclosed by these companies, SK Hynix agreed to distribute a bonus equivalent to 10% of its operating profit to employees in a wage agreement reached in September 2025.
Samsung, after facing threats of an 18-day strike by employees in May, agreed to distribute a special bonus equivalent to 10.5% of its semiconductor business profit.
Quoting a union official who preferred to remain anonymous, Reuters reported that an ordinary storage chip worker – with a basic salary of 80 million Korean won (approximately $52,400) – is expected to receive a bonus of around 626 million Korean won (approx. $410,000) this year.
According to Reuters’ calculations, if SK Hynix achieves annual profits of 25 trillion Korean won in 2026, the company’s ordinary employees are expected to receive over 700 million Korean won (approx. $454,851) in bonuses.
The Bank of Korea stated that ordinarily, bonuses do not exert significant pressure on demand as they are not a permanent source of income growth. However, when “exceptionally large special bonuses” are distributed, wage growth may spread to other industries, significantly exacerbating inflationary pressures on both supply and demand sides.
“Of particular concern is that due to the extraordinarily large scale of performance bonuses recently distributed in the IT industry, the actual impact may exceed expectations,” the central bank wrote.
Reports from South Korea indicate that some technology industry professionals have been making large purchases of luxury goods at department stores, including handbags, jewelry, and watches.
Deputy Governor Lee Ji-ho of the Bank of Korea stated at a press conference on June 17, “Luxury goods sales in Suwon and other areas, as well as in the luxury goods section of department stores, have shown significant growth, and this trend of growth may gradually spread.”
The Bank of Korea noted that in Gyeonggi Province, where major semiconductor factories such as Samsung Electronics and SK Hynix are located, the growth rate of credit card spending in areas near the chip production bases and surrounding residential areas is significantly higher than in other regions.
The Chosun Ilbo reported that luxury goods consumption in the southern part of Gyeonggi Province, where the headquarters of Samsung and SK Hynix are located, is “rapidly growing.” In May, sales of luxury goods at the Shinsegae department store in Gyeonggi Province increased by 53.6% year-on-year, with sales of luxury jewelry soaring by 146.3% and luxury watches by 85.3% during the same period. With the boost from luxury goods sales, the department store’s overall sales increased by 19%.