'Performance bonuses paid due to strong earnings from Samsung Electronics and SK Hynix have boosted consumption in semiconductor-beneficiary regions such as Icheon, Hwaseong, and Cheongju by up to 4% compared to non-beneficiary regions. Next year, the scale of performance bonuses from these two companies is expected to increase about fivefold over this year's level, potentially raising the private consumption-driven economic growth rate by up to 0.09 percentage points.'
'According to the Bank of Korea's BOK Issue Note released on the 31st titled "What Will Happen to Consumption in Semiconductor-Beneficiary Regions? Spillover Effects Examined Through Regional Microdata," monthly consumption in areas with a high proportion of semiconductor workers among the adult population was up to 4% higher than in non-exposed regions after performance bonuses were paid.'
'The semiconductor exposure rate (proportion of semiconductor workers among the adult population) was highest in Icheon, where SK Hynix headquarters is located, at 6.8%. Hwaseong, home to Samsung Electronics' facilities, followed at 4.6%, and Cheongju's Heungdeok District, where an SK Hynix factory is situated, came in third at 3.6%. Consumption in these three high-exposure regions increased by up to 1.6% compared to non-exposed areas after the 2025 performance bonus payments. Although the increase narrowed somewhat in the second half of last year, it expanded again this year as the scale of bonuses grew, reaching a gap of 3.7% in June. In monetary terms, cumulative consumption increases in semiconductor-beneficiary regions from February last year through June this year are estimated at approximately 1.1 trillion won. If current consumption patterns continue through the end of the year, cumulative increases could reach 1.7 trillion won.'
'The average annual consumption increase for 2025–2026 is projected at about 800 billion won, equivalent to 2% of last year's total private consumption increase of 41.3 trillion won. The consumption spillover rate—the proportion of after-tax performance bonuses that translated into consumption—is estimated at 27% for last year and 21% for this year.'
'A Bank of Korea official stated, "There are limits to how much consumption spending increases proportionally as the scale of performance bonuses grows significantly. As the denominator (performance bonuses) expands rapidly, there has been a tendency for the consumption spillover rate to decline."'
'The impact on growth rates so far has not been significant. Analysis indicates that consumption increases driven by performance bonuses have contributed to domestic value-added, raising GDP (gross domestic product) levels by 0.01% last year and 0.03% this year. However, the spillover effects are expected to become substantial next year. The total after-tax performance bonuses from Samsung Electronics and SK Hynix expected to be paid next year—immediately cashable—are projected at 21.9 trillion won, approximately five times this year's 4.4 trillion won. This amount equals 1.6 times the 13.5 trillion won in consumption coupons distributed by the government last year.'
'Under a conservative scenario where the consumption spillover rate declines due to increased performance bonuses, next year's GDP level is estimated to be 0.08% higher than it would have been without the semiconductor boom. If the consumption spillover rate remains at this year's level, the GDP enhancement effect could expand to 0.12%. This represents a scale capable of boosting next year's economic growth rate by 0.06 to 0.09 percentage points. However, consumption increases have been concentrated in high-value discretionary goods such as automobiles, department stores, and home appliances and furniture.'
'These items have high import shares or limited domestic employment and income generation effects, restricting the virtuous cycle effect of "consumption → income → consumption."'
in ECONOMY
