The article titled “Govt spark likely for long energy storage” (continued on page 6 as “India races to build long-duration energy storage”) from the May 18, 2026, edition of Mint Bengaluru is reproduced below:
Govt spark likely for long energy storage
Support for long-duration energy storage to aid green power
By Manas Pimpalkhare & Rituraj Baruah New Delhi
India is scrambling to solve a growing clean-energy paradox: the country is adding renewable power at a record pace, but it lacks the storage capacity needed to use that energy when the sun sets and wind generation drops.
To bridge that gap, the Union government is preparing a financial support scheme for long-duration energy storage (LDES) technologies, according to three people aware of the discussions.
The proposed scheme—part of the government’s ‘India Battery Storage Vision 2047’—is being worked out by the ministries of power and heavy industries, and is expected to be rolled out by fiscal year 2028 (FY28) under the administrative control of the power ministry, the people said on condition of anonymity.
The push comes as policymakers increasingly acknowledge that India cannot fully leverage its rapidly expanding renewable-energy capacity without large-scale storage infrastructure.
Unlike battery energy storage systems (Bess), which typically store electricity for one to four hours, LDES technologies can supply power for eight hours or more. These include pumped hydro storage, flow batteries, compressed air energy storage (CAES), and sensible heat storage.
A viability gap funding (VGF) mechanism for LDES is currently being worked out, one of the officials said, adding that the government could also consider interest subvention support to improve liquidity access and accelerate adoption.
“Heavy reliance on short-duration storage could reduce energy security, increase system costs, and limit the feasibility of achieving 100% green power penetration,” another official said, adding that long-duration storage is critical for optimal integration of renewable energy, “thereby achieving energy transition in the true sense”.
The first official added that the high cost of storage and lower technological maturity compared with lithium-ion battery systems have so far delayed large-scale deployment of LDES technologies.
“There has been consideration for support to these new-age technologies for a long time now, but commercial viability has been a concern,” the first person said. “Now, it is high time to work to accelerate LDES adoption. This includes creating a technology-agnostic definition for LDES, incorporating storage targets into the National Electricity Plan (NEP) and Energy Storage Obligation (ESO) framework, and developing a national deployment roadmap”.
Pilot projects are also being planned to test LDES technologies across different grid conditions and establish commercial use cases.
The policy push comes amid an aggressive renewable-energy expansion drive. India has added 178.88 gigawatts (GW) of renewable-energy capacity over the past five years, taking clean energy’s share in the. However, India’s storage infrastructure has failed to keep pace with the rapid expansion of renewable generation capacity. India would have required about 47GWh of battery storage capacity by FY27 to support renewable integration, but only 795 megawatt hours (MWh)—with interstate transmission system (ISTS) charge waivers for pumped storage and renewable-linked battery storage projects until June 2028.
Queries emailed to the Union ministries of power and heavy industries remained unanswered till press time.
India’s push mirrors a broader global shift toward LDES solutions as countries look to balance renewable-energy capacity with grid stability. According to an April 2026 whitepaper by policy advocacy group Long Duration Energy Storage Council, the governments of UK, Germany, California and New York in the US, and New South Wales in Australia are in various stages of work to accelerate LDES adoption.
POWER PLAY: BATTERY VISION
- LDES technologies can supply power for eight hours or more.
- These include flow batteries, pumped hydro storage, and CAES.
- A VGF mechanism for LDES is currently being worked out.
The article titled “Intel-Apple: Why AI chips are a big deal” from the Plain Facts section of the May 18, 2026, edition of Mint Bengaluru is reproduced below:
INTEL-APPLE: WHY AI CHIPS ARE A BIG DEAL
BY HOWINDIALIVES.COM
Intel has reportedly signed a preliminary deal with Apple to make some chips for its devices. While the details are not yet clear, this reflects the semiconductor industry’s evolving landscape, driven by commercial and geopolitical interests. The deal is expected to benefit both companies. The partnership offers a validation to Intel’s foundry business, a key pillar of its turnaround strategy. It also helps Apple diversify its supply chain, which has been increasingly strained by demand from AI chipmakers such as Nvidia. The agreement, in which the US government reportedly played a significant role, also highlights how deeply geopolitics is becoming intertwined with the global chip business.
THE AI SQUEEZE
Demand for AI chips is expected to rise in coming years. Hyperscaler-driven AI infrastructure spending has surged since 2023. Combined capital expenditure reached hundreds of billions in 2025 and is projected to climb further in 2026. Nvidia rules the AI accelerator market with over 80% share, its data centre growth enabling it to overtake Apple as TSMC’s largest customer in 2025.
At TSMC, Apple’s revenue share declined to around 17%, while Nvidia’s rose to 19% for 2025. Capex on chips and servers is projected to cross $483 billion by 2028, from an estimated $280 billion in 2025, per Morgan Stanley Research. For Apple, which secured a large part of TSMC’s newest production capacity for its M-series chip, this competition creates pressure. The firm has accelerated diversification, including a preliminary manufacturing pact with Intel and discussions with Samsung, to cut reliance on TSMC amid capacity shortages.
CAPACITY CRUNCH
For Apple, the logic is different. It remains deeply dependent on TSMC for manufacturing nearly all of its custom-designed chips. It also had leverage on the company. Every time TSMC developed a new, more advanced chip-making process, Apple was the first major customer, sometimes buying up nearly all of the initial production.
In the past few years, demand for TSMC’s capacity has grown among AI chipmakers such as Nvidia and AMD. AI chips also occupy far more physical space on silicon wafers and generate higher profit margins than traditional consumer electronics chips. Apple, despite selling millions of devices each year, is losing its historical leverage over TSMC’s advanced manufacturing capacity, and has started facing shortages. In January, Apple CEO Tim Cook said advanced chips shortage affected some products. Apple is in supply chase mode to meet customer demand and is “currently constrained” by advanced node availability.
FOUNDRY VALIDATION
Intel’s deal with Apple could help the US chipmaker regain its standing in the sector. For many years, Intel was an industry leader. By mid-to-late 2010s, it lagged Taiwan Semiconductor Manufacturing Company (TSMC) whose factories now produce some of the world’s most advanced chips for companies. Intel outsources some production to TSMC.
Under former chief executive Pat Gelsinger, Intel unveiled its IDM (Integrated Device Manufacturing) 2.0 strategy, set up new fabrication plants and launched Intel Foundry Services to compete with TSMC. The turnaround effort, now led by chief executive Lip-Bu Tan, has been costly and uneven. Its foundry business has faced delays and financial losses. Securing Apple as a customer could rebuild Intel’s credibility as a chip manufacturer and pave the way for more customers. Investors have been positive on Intel in recent months, with its stock price doubling since April. The deal reports on 8 May led to a further rise.
A FULL CIRCLE
The deal also represents a key phase in Intel’s long ties with Apple. During the 1980s and 1990s, Intel was on the opposing side of Apple. It anchored the Wintel ecosystem (with Microsoft Windows as the operating system and Intel supplying the key hardware). Apple positioned itself as an alternative, relying on the PowerPC chip developed with IBM and Motorola. That changed in 2005, when Steve Jobs announced Apple had shifted Macs to Intel processors.
In the mobile era, Intel missed the smartphone wave while Apple built in-house chip design expertise using ARM-based architectures. By 2020, Apple had designed its own processors for Macs and relied on TSMC to manufacture them. Intel’s revenues have been shrinking since 2021 as the company missed out on AI-boom opportunities. The current deal marks a fresh beginning for Intel. While it will not be supplying its own chips for Apple devices, it will manufacture Apple-designed chips.
SILICON SOVEREIGNTY
Geopolitics is also a major driver. Reducing dependence on TSMC also means managing Taiwan-related risks amid tensions between the US and China. The deal with Intel promises Apple greater flexibility during uncertainty. The deal also highlights how deeply governments are shaping the semiconductor industry.
According to reports, federal officials encouraged the tie-up, leveraging influence they gained after the US took a 10% stake in Intel last year. For decades, the US led the world in technology, with firms dominating the semiconductor market, but making them mostly in Asia. Now, it wants more advanced chip production back into the country. Intel remains central to that ambition. Manufacturing advanced chips is difficult and expensive. The larger question is whether Intel can turn renewed attention into a sustainable manufacturing comeback.
The article titled “The oil shock is causing a $45 billion rupture in the economy” from the Global section (page 8) of the May 18, 2026, edition of Mint Bengaluru is reproduced below:
The oil shock is causing a $45 billion rupture in the economy
Surging prices at the pump are eating an outsize share of low- and middle-income consumers’ salaries.
By David Uberti
The largest oil disruption in history is widening a divide in the economy. Americans have cumulatively spent about $45 billion more on gasoline and diesel during the war with Iran than they did during the same period a year ago, according to an analysis of OPIS pricing data and federal demand figures. The surging costs are eating an outsize share of low- and middle-income consumers’ paychecks, darkening their outlook relative to the well-off.
At the same time, investors in oil-and-gas companies are watching their portfolios swell. Big energy returns bolstered a blockbuster corporate-earnings season and added momentum to the artificial-intelligence-led rally that has pushed the stock market to records. While higher inflation and borrowing costs have added stress on less-affluent Americans, many economists believe high earners will continue powering the U.S. ahead.
President Trump campaigned on cutting Americans’ energy costs in half. Now, as higher prices contribute to sagging poll numbers and some of the lowest consumer-sentiment readings on record, he has argued that the oil shock is benefiting the energy-rich U.S. in the form of record exports.
“The question is, of course, who is the U.S.?” said Isabella Weber, an economics professor at the University of Massachusetts, Amherst. “If we look at the different income groups in the United States, it’s really the richest of the rich who benefit”. Tax refunds have helped many Americans weather the early stages of the shock. “But the flow of refunds will taper dramatically in May, leaving consumers far more exposed to the surge in fuel costs,” Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, told clients Thursday.
In March alone, U.S. airlines spent almost $1.3 billion more on jet fuel than they did a year earlier, according to the Transportation Department. If gasoline prices stay near their current levels through 2026, JPMorgan estimates Americans will shell out $172 billion more than they did last year. That figure doesn’t include additional diesel costs.
The resulting hit to wallets is already exacerbating a split between groups. While year-over-year spending by middle- and higher-income Americans on airlines, lodging and other tourism has grown, according to the Bank of America Institute, lower-income households are pulling back. Fast-food chain Wingstop, pawnshop operator Ezcorp and other companies that often cater to those customers similarly cited the pain of high pump prices during recent earnings calls.
Gas stations themselves are also feeling the impact. As prices surged in March, households earning less than $125,000 a year cut how much they collectively fueled up, according to Federal Reserve Bank of New York research. Higher-income motorists’ consumption barely budged that month, a departure from how they pulled back during the 2022 shock, said Maxim Pinkovskiy, an economic research adviser at the New York Fed.
One thing that is different in the current situation is that research on the fallout from Russia’s war on Ukraine found roughly 50% of the huge profits from U.S. energy firms in 2022 flowed to the wealthiest 1% of Americans. This year, a 32% gain in the S&P 500 energy sector is shielding shareholders from some of inflation’s bite. Oil-and-gas companies’ collective earnings climbed in the first quarter to their highest levels in years, according to analytics firm Geologic’s Evaluate Energy data. With few signs of new drilling in the American oil patch, a continued closure of the Strait of Hormuz signals even bigger profits and dividends in the months ahead.
The current price run-up is pumping tax revenues into communities stretching from Alaska to North Dakota to the small towns speckling West Texas and New Mexico. But a tepid response from American energy producers, as well as technological advances in drilling, suggest the go-go days of the shale boom creating armies of high-paying jobs are over. The number of oil-drilling rigs nationwide dropped 11% over the past year, according to Baker Hughes.
Free-cash flow across Exxon Mobil, Chevron, BP, Shell and TotalEnergies in the first quarter ballooned 84% from fourth-quarter levels, to $36 billion, according to Geologic’s Evaluate Energy data. The firm’s analysis of 37 smaller U.S. oil-and-gas producers found a 53% collective climb during the period, to $17 billion.
That hasn’t translated to booming dividends or share buybacks just yet. The start of the wartime price run-up “was so late in the quarter,” said Mark Young, senior analyst at Geologic. “If you extrapolate that out [into the second quarter], cash flow must be coming in pretty quickly for them”.
U.S. crude prices have averaged almost $99 a barrel since April 1, up 59% from the year-earlier period, and there are few signs energy shipments are beginning to move in earnest through the Persian Gulf. The ripple effect through the globe-spanning supply chain is also boosting shares of U.S. pipeline operators that ferry oil to refineries, fuel makers that turn crude into products and tanker operators that carry petroleum around the world.
The article titled “Why Bollywood stars are buying rights to their old hit movies” from the Corporate section (page 5) of the May 18, 2026, edition of Mint Bengaluru is reproduced below:
Why Bollywood stars are buying rights to their old hit movies
By Lata Jha NEW DELHI
Actors long associated with iconic film roles are increasingly acquiring rights to older hits, betting that nostalgia-driven intellectual property can generate fresh value through remakes, sequels, streaming, licensing and franchise extensions in an overcrowded content market.
Recently, actor Sanjay Dutt acquired the rights to his 1993 hit Khal Nayak that he plans to reimagine along with Jio Studios and Aksha Kamboj’s Aspect Entertainment. In the past, stars like Shah Rukh Khan too have bought rights to older hits from original producers, reflecting a broader shift in how value is captured in the content economy. Khan has bought rights to older hits such as Kabhi Haan Kabhi Naa and One 2 Ka 4 from original producers.
For producers, selling rights can provide immediate liquidity, reduce risk and monetize legacy content that may otherwise remain underexploited. For actors with enduring brand equity, ownership offers long-term upside tied to audience recall and personal association, especially as an overcrowded market has made monetization harder for most titles, increasing the premium on films with lasting cultural resonance.
“The original producer has typically recouped their investment through box office, satellite deals, and music licensing long before an actor comes knocking. What remains is residual value, which for an older film is modest at best. The producer is essentially sitting on a depreciating asset,” said Avadhi Joshi, founding partner, Minara Legal. In such deals, the producer monetizes a windfall they couldn't have generated alone, and the actor acquires an asset whose value they themselves can grow, Joshi added.
Film producer Anand Pandit said nostalgic IP remains a premium asset, whether repurposed as a remake or extended into a sequel. “On YouTube alone, classic songs and films have millions of views. When blockbusters from the past are screened, sometimes they do better business than the latest [releases],” he said.
The article titled “Balancing creativity and practicality” from the Monday Motivation section (page 14) of the May 18, 2026, edition of Mint Bengaluru is reproduced below:
Balancing creativity and practicality
Neha Gupta, the co-founder of Beyond Designs, on the art of listening
By Shail Desai
Art has always been Neha Gupta’s quiet escape. She would spend hours sketching and painting, exploring her creativity as a little girl. Over time, she gained interest in a deeper understanding of spaces and buildings. “Architecture felt like art that people could actually live in and interiors were what made those spaces warm, inviting and personal,” says New Delhi-based Gupta, co-founder, principal designer and restaurateur at Beyond Designs.
As a student of architecture and design, she first realised that functionality was as crucial as aesthetics. It defined her approach at the luxury interior design studio that she runs alongside her husband, Sachin.
“The smallest details can make the biggest difference. That balance between creativity and practicality continues to guide my work even today,” she says.
Beyond the studio, Gupta has extended her design sensibilities to experiential dining and has launched six establishments so far.
Gupta talks to Mint about mentorship and what she’s learned through motherhood.
Who do you consider your mentor? I deeply value mentors who encourage growth and honest feedback. I have learned from seniors in the industry, from collaborative experiences and from life itself. Every phase teaches you something new if you are open to learning.
One major insight you worked on with your mentor’s guidance? One key lesson was that good design begins with listening. Keeping your ego aside allows you to truly understand the client and evolve creatively. Growth happens when you remain open to feedback.
What are some productivity principles you follow? I prioritise what truly matters each day and avoid unnecessary complications. Delegation and clarity are very important to me. Consistency and organisation are the foundations of productivity.
How do you unwind? Do you pursue any serious hobbies? I unwind by listening to Bollywood music and watching movies—they instantly lift my mood. Spending time with friends and family helps me recharge. I absolutely love dancing, it’s my favourite stressbuster. And of course, a little shopping now and then always adds joy!
How have you managed your work commitments alongside the family? Motherhood has taught me efficiency and presence. I focus on being fully present wherever I am—whether at work or with my family. A strong support system and clear priorities make all the difference. It’s about balance, not perfection.
Monday Motivation is a series in which business leaders discuss their mentors and their work ethics.
The article titled “Like it or not, AI is likely to transform capitalism” from the Views section (page 12) of the May 18, 2026, edition of Mint Bengaluru is reproduced below:
Like it or not, AI is likely to transform capitalism
This is not just another tech revolution. AI could alter how output is generated, resources are allocated and the ratio of what capital and labour earn. Let’s not get blindsided by it
OUR VIEW
Two centuries and a half ago, Adam Smith used the example of a pin factory in The Wealth of Nations to explain how capitalism uses division of labour to boost productivity by splitting production into specialized tasks done by workers paid to work in close coordination for efficiency. But what happens to this model if AI agents run factories and companies?
Andon Labs, a US-based startup, runs a cafe where tasks like inventory control, hiring, scheduling and operations are supervised by Mona, an AI agent powered by Google Gemini, even as human baristas brew and serve coffee. Anthropic’s Claude Sonnet 3.7, OpenClaw artifacts and other tools have also shown an ability to run businesses. How long before complex firms turn CEO roles over to artificial intelligence (AI)? Could AI-run startups emerge? And if Agentic AI systems designed to optimize resources find human behaviour hard to grasp, would they opt for fellow machines that do not tire, let alone unionize, seek meaning in their jobs and demand a work-life balance? Clearly, capitalism is headed for uncharted territory.
It is not just pricing, procurement, logistics, hiring and advertising that AI could take over, but capital allocation too. Zoom out, and that logic can apply to how capital markets allot funds. Algorithmic trading has been around for years. Despite differing systems at play, they often act in sync—as we saw in the US ‘flash crash’ of 2010. Rival algorithms can respond in unison to the same signals. That is also why ride-hailing services are found to mirror each other. Markets, however, are supposed to thrive on diverse views; humans disagree, speculate, make irrational bets, invest on emotional cues and succumb to fear or greed.
Consumers behave all too human too. So, are we staring at a future of people being force-fit into a framework of digital templates? At this juncture, all we can count on is hyper-efficiency. With business operations stripped of slack by AI, optimists expect output per worker to soar. While new jobs will surely be generated, it could spell a scenario in which capital dominates labour so thoroughly as a factor of production that the state will need to intervene in the latter’s favour.
This is less of an anxiety in India than in the tech-suffused West, where fears have arisen of an industrial compact being broken. Since the time of Henry Ford’s assembly line that gave productivity a leap, capitalism has sought to create demand by paying people enough to buy all that it churns out. Should AI enrich business shareholders and push salaried folks out of jobs, many reckon, overall demand would have to be sustained by a redistributive policy that taxes capital heavily to fund a universal basic income. So far, regulatory talk has focused on AI safety, given how agentic systems left to their own devices could blunder or go rogue. Soon, social safety nets may need policy-level attention.
The jury is out on how well an AI-optimized free market will serve society, which, let’s be clear, is why capitalism exists in the first place. Efficiency is a worthy aim, but its gains are finite, and while AI can be ‘inventive,’ it’s doubtful if it can create value from true originality. It takes intuition, curiosity, obsession and more; think of the out-of-the-box ideas of Steve Jobs at Apple. It takes leaps of thought that are not yet documented; think of Archimedes, who said he could move the world with a lever that’s long enough and a place to stand. In short, it takes imagination, without which capitalism would be too dreary to uplift human lives.
The article titled “Why some people put on poverty as though it’s make-up” from the Modern Times section of the Views page (page 12) of the May 18, 2026, edition of Mint Bengaluru is reproduced below:
Why some people put on poverty as though it’s make-up
By Manu Joseph
In his first speech as chief minister of Tamil Nadu, Joseph Vijay said in Tamil, “I have known poverty; I’ve known hunger. I am not from some royalty.” This whole country seems to be filled with self-made men. Except that most of them may not be at all.
I happened to be Vijay’s classmate when we were around eight years old. Oddly, the reason why I remember him at all and could later recognize him as the same guy on film posters, is that he was the first rich boy I knew, at least rich by the standards of the Kodambakkam suburb of Chennai. Years later, when he was eighteen, he was cast in the lead role of a film that his father made. Some of the biggest yarns of our times are tales of rags-to-riches. Often, they are exaggerations of some hard gives them some extraordinary advantages.
The imagined poverty of public figures has created a disease in society. It’s called inspirational stories. In such a story, a man who claims to have “known hunger” or “slept in a railways station” hints that he made it through stellar human qualities. This cements the notion in every generation that there is a path to escape an impoverished life, and if you have not managed to, maybe there is something wrong with you. And most poor people probably feel there is indeed something wrong with them, their minds, their character or perhaps in their stars.
The rejection of luck’s outsized role in the lives of the upper class is one of the weirdest aspects of human nature. Recently, when thousands of househelps from West Bengal across Indian metros vanished to vote in their state elections, Gurugram was particularly hard hit. On a WhatsApp chat group in my colony, affluent people cursed maids for sloth and unprofessionalism. One of them said, “(we) These are very different things. Poverty is not a temporary misfortune of the fortunate. Poverty is not only the absence of money, but also immersion in a whole environment that is cut off from money. It is the amnesia of money, where there is no recollection or evidence at all among those who suffer it that their kind once had money. To be poor is to be stuck in time, to live in a different era from luckier people. Poverty is always in relation to the rest of society.
Yet, not only in India but across the world, people are quick to claim poverty. They put on “poverty like you put on makeup,” as Lennard Davis, a professor at the University of Illinois, once said of US vice-president J.D. Vance, whose claims of growing up poor appear to be exaggerated. No one wants to be poor but everyone wants a poor past, especially public figures for it shows them as gritty people who came up the hard way. It is an oddly attractive quality in a person to a crowd, even though it is unattractive at a personal level. Its point this out, Indians I know in America respond with rage. This makes me wonder how they ever cleared the analytical reasoning and reading comprehension sections of those objective-type tests. Or maybe they are truly naive about how poor their country of origin actually is.
This seems to be a problem that afflicts even Google CEO Sundar Pichai. Once, as though in response to claims such as mine, he said, “My father spent... a year’s salary on my plane ticket to the US so I could attend Stanford.” Considering the Indian per capita income in the early 90s and the price of a ticket to the US, the fact that his father’s annual salary was as much as the airfare points to the probability that his household was in India’s top 5% they made it against severe odds. Most people who have triumphed are ‘nepo-babies’ with some ‘my-dad-had-bad-days’ stories. And there appear to be numerous old men who “came to Bombay with ten-rupees in my pocket.” Yet, somehow, just months later they are in rooms full of influential people.
Many Indian immigrants in America are belligerent about the notion that they had made it the ‘hard way.’ Yet, their ability to reach America is in fact evidence not of their brilliance, but that they hail from luckier Indian households. In the 80s only the upper middle class and the rich could make it to the rarefied places that eventually gave one a shot at America. There might be exceptions but exceptions say nothing. Those who claim hardscrabble pasts probably confuse being broke with being poor. They’re not the same.
Manu Joseph is a journalist, novelist and screenwriter. His latest book is ‘Why the Poor Don’t Kill Us.’
The article titled “Talking of a ‘people’s dividend’ can hurt Korea’s stock market” from the Views section (page 13) of the May 18, 2026, edition of Mint Bengaluru is reproduced below:
Talking of a ‘people’s dividend’ can hurt Korea’s stock market
Socialist rhetoric or policies could get in the way of an AI windfall
By Shuli Ren
South Korea has the world’s best-performing stock market this year. It has now been thrust to the forefront of a global discussion over whether artificial intelligence (AI) widens wealth inequality—and how governments can ensure that society at large benefits from this revolutionary technology.
In a Facebook post on Monday, Kim Yong-beom, a veteran economist and chief of policy for President Lee Jae Myung, floated the idea of a “people’s dividend”. His goal is to encourage the idea that profits made by the few winners are shared with those who lack AI-related skills or access to capital.
This is reminiscent of President Xi Jinping’s “common prosperity” drive in 2021, a socialist push to broaden China’s middle class. Dividing up the AI corporate windfall aside, Seoul has also focused on Korea’s elevated apartment prices. It has followed Xi’s line of “housing is to be lived in, not speculated on,” reinstating a heavy capital gains tax on multiple-home owners.
While this may be political posturing ahead of local elections in June, investors are not taking any risks. The benchmark Kospi index tumbled as much as 5.1% on Tuesday after Kim’s post, before paring losses. The influential policy advisor has since clarified that he would like to see tapped “excess tax revenue” generated from the AI boom, rather than the rollout of a new windfall levy on corporate profits.
In the eye of the storm are the two semiconductor giants, Samsung and Hynix, which sell memory chips to AI data centres. As we move to the agentic world, allowing the likes of OpenClaw to book travel and reply to e-mails, these models need a lot of memory chips to recall our preferences and past transactions. As a result, the two chipmakers are generating the kind of profits that Korea Inc has never seen before.
Samsung and Hynix are expected to be among the world’s five most profitable companies this year, earning as much as Alphabet and Microsoft. Considering free cash flow, they are doing even better, because the US hyperscalers have to spend big on infrastructure—including buying memory chips. In April, Korea’s chip exports jumped 174% year-on-year and total exports to the US rose by 54%.
While the government’s intentions are good, isn’t it a bit early to talk about sharing the corporate windfall? The president has been making a concerted effort to narrow the notorious Korea discount, and offered capital-gains-tax exemptions to retail investors that sell their overseas holdings and invest domestically.
At around 7,850, the benchmark index has gone well above Lee’s “Kospi 5,000” slogan. But Korea’s stock market is by no means out of the woods yet. Samsung and Hynix are only the world’s 11th and 15th largest companies by market value, respectively, despite their outsized profit outlook and the pervasive narrative of a semiconductor supercycle. The Kospi is valued at 8.3 times 12-month forward earnings, below its 10-year historical average. In other words, the index’s sharp rise this year is due entirely to upward earnings revisions, not an expansion of valuation multiples.
Politicians injecting a socialist tone is not conducive to fostering a healthy stock market, which after all is a celebration of corporate profits and capitalism. China learnt this the hard way, having witnessed a years-long bear run shortly after Xi’s common prosperity push. Beijing has practically abandoned this slogan.
Korea’s stock market is at an interesting inflection point. This month, Interactive Brokers said it would give US retail investors direct access to the nation’s equities, making it the first major US-based broker to offer such a service. The government would do well to take a market-friendly tone.
There’s also the argument that profits won’t just stay with the two chipmakers’ shareholders. There will be economic trickle-downs. For instance, Samsung and Hynix can’t make their chips without tools. As AI craves more memory capacity and factory expansion, equipment vendors such as Wonik IPS and Eugene Technology can expect bigger orders, as can chemicals makers like Hansol. These smaller, under-the-radar firms are likely the ones that the government is keen to foster.
Or how about those working along the AI supply chain? Hynix has agreed to allocate 10% of annual operating profit to a performance bonus pool, resulting in an average payout of about 1.5 times annual salary last year. Samsung has been haggling with its labour union over compensation. But one thing is clear, companies need to cough up to retain engineering talent.
The Lee administration should be patient and let Korean chipmakers flourish. Socialist rhetoric can only be a road to common poverty.
Shuli Ren is a Bloomberg Opinion columnist covering Asian markets.
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