South Korea's chip law took effect on 11 August without the 52 hour exemption industry wanted

South Korea's Special Act on Strengthening and Supporting the Competitiveness of the Semiconductor Industry came into force on 11 August 2026, alongside an enforcement decree the cabinet approved on 4 August. The law sets up a presidential committee, designates semiconductor clusters, funds power, water and road infrastructure at between 50 and 100 per cent of cost in non capital regions, and creates a dedicated special account. The measure the industry lobbied hardest for is not in it: an exemption from the country's 52 hour weekly working time cap for research and development staff.

That cap comes from the Labor Standards Act as revised in 2018, which allows 40 ordinary hours plus 12 hours of overtime a week. The chip bill cleared the National Assembly on 29 January 2026 after roughly 18 months of deadlock and was enacted on 10 February. The exemption clause was removed following union opposition, with a supplementary opinion attached acknowledging a need for greater flexibility in the industry and the question referred back to committee. Industry Minister Kim Jung-kwan told the Korea Herald on the day of passage that semiconductors were "a strategic asset that will define our national and economic security in the era of AI".

The argument reopened almost immediately in a different vehicle. On 30 July 2026 the trade ministry reported a provisional plan for a "mega special zone" covering the Gwangju and South Jeolla chip project. According to the Korea Times, it proposed lifting the 52 hour cap for semiconductor research staff, extending fixed term employment from two years to four before conversion, widening the jobs open to dispatched workers, and stretching the flexible working hours window from one month to six. Both union confederations objected. The Korean Confederation of Trade Unions said the zones would "produce neither future-oriented jobs nor good jobs" on that basis. The Federation of Korean Trade Unions warned that once exceptions are allowed for megaprojects, "those exceptions will inevitably become the norm".

The cabinet is split in public. Kim Jung-kwan, now Minister of Trade, Industry and Energy, argued that the 52 hour rule "should not weigh on those who are willing to work more", and said on 12 August 2026 that a Korean style white collar exemption was under discussion along with calculating overtime across months, quarters or half years rather than weeks. He also invoked speed, noting that TSMC took 27 months from announcement to completion in Kumamoto and that Korea needed to be faster. Labour Minister Kim Young-hoon has pushed back, arguing that firms should raise productivity rather than relax the limit. President Lee Jae Myung has characterised the disagreement as ordinary democratic debate requiring consensus among stakeholders.

What is disputed is whether the cap is actually binding. A special overtime scheme for semiconductor research and development workers, introduced in March 2025, already permits up to 64 hours a week for three months, then 60 hours for a further three months. Figures obtained by Representative Lee Yong-woo and reported by the Korea Herald on 12 August 2026 show Samsung Electronics lodged two applications under the six month scheme and 20 under the three month scheme, while SK hynix lodged none and five respectively. Only four companies applied for the six month scheme between March 2025 and June 2026. Critics read that as evidence the existing flexibility is sufficient and unused. The Korean Institute of Semiconductor Engineers takes the opposite view, saying that "the uniform and rigid application of the 52-hour workweek to R&D employees could undermine South Korea's technological competitiveness", and academics are pressing for the provisions to be inserted into the mega special zone bill later this year.

The backdrop is a country that still works long hours by rich country standards while reducing them. OECD figures reported on 5 July 2026 put average annual hours per worker in Korea at 1,833 in 2025, down 32 hours from 1,865 in 2024. That is the sixth highest among member countries, 97 hours above the 1,736 hour average across 36 members, 235 hours more than Japan and 501 hours more than Germany, which recorded 1,332.

The traffic elsewhere runs the other way. In Australia, the Fair Work Commission announced on 26 August 2025 that the right to disconnect had extended to small businesses and their employees, allowing refusal of out of hours contact unless the refusal is unreasonable. In the European Union, the Parliament voted 472 to 126 with 83 abstentions in January 2021 for a directive on the right to disconnect, social partner negotiations on a binding telework agreement collapsed in November 2023, and the Commission opened a first stage consultation of social partners on fair telework and the right to disconnect on 30 April 2024.

What is not known is whether the exemption will be written into the mega special zone bill at all, whether it would be confined to designated zones or become a general white collar carve out, and when a text will be introduced. Nor is it settled whether the low uptake of the 2025 scheme reflects weak demand or an application process employers find unusable.