Samsung, SK hynix employees skip the line as department stores court deep pockets

A semiconductor supercycle has induced a spending spree by employees of Samsung Electronics and SK hynix, who stand to earn record bonuses on the back of booming business.

A department store in Bundang District of Seongnam, Gyeonggi, will run a promotional event from June 23,  offering employees at Samsung Electronics and SK hynix fast-track passes that allow them to skip lines for luxury boutiques, where customers often queue for entry.

Parking vouchers and discount coupons for the department's restaurants are also part of the promotion.

“Traditionally, men in their 20s and 30s weren't our main customers, but purchases by those groups have recently increased significantly, particularly at watch stores,” said a department store employee surnamed Lee.

“Customers are spending more than before, such as buying outerwear instead of shirts or purchasing two items after originally thinking of buying just one.”

Southern Gyeonggi is home to some of Korea's largest semiconductor operations, including Samsung's headquarters in Suwon and production facilities in Hwaseong, Pyeongtaek and Yongin. The region is also home to SK hynix's headquarters and manufacturing facilities, located in Icheon.

With employees at the two companies set to receive performance bonuses worth hundreds of millions of won, department stores in the area have been enjoying rising sales.

Sales at Shinsegae South City in Yongin, Gyeonggi, rose 16.2 percent on year in May, with jewelry sales rising 120 percent and watch sales up 60 percent.

Sales at Hyundai Department Store's Pangyo branch in Seongnam rose 44.7 percent on year in the same period. Lotte Department Store's Dongtan branch in Hwaseong saw sales rise 30 percent from a year earlier.

Luxury goods aren't the only thing the chipmakers' employees are spending money on.

Many are eyeing apartment purchases, with the high demand driving up prices.

“Employees from large corporations such as SK hynix and Samsung Electronics visit about four to five times a day, and inquiries have increased two to three times compared to previous years,” said a real estate agent surnamed Eom, who spoke to reporters near Dongtan Station in Hwaseong on June 2. “Compared to even just a month ago, the listed prices of apartments have risen by nearly 200 million won [$132,000]."

An 84-square-meter (904-square-foot) apartment in the Dongtan Station Lotte Castle complex sold for a record 2.2 billion won on June 4, according to the Ministry of Land, Infrastructure and Transport’s transaction price disclosure system. Dongtan is located near Samsung's Hwaseong and Pyeongtaek plants as well as the Yongin semiconductor cluster, with many employees living in the area.

Housing prices are also rising near subway stations with bus stops for company buses in Yongin, Seongnam and Suwon.

“A Samsung Electronics employee signed a contract for an apartment just a few days ago,” said Nam Seon-sook, who runs a real estate agency near Suji-gu Office Station in Yongin. “Young employees in their 30s are coming to make purchases. Listings are so scarce that almost any property put on the market sells within a week.”

The surge in demand has left many neighborhoods short on listings.

“The area is popular because Samsung Electronics and SK hynix employees can commute by shuttle bus," said another real estate agent. "Apartment prices range from 1.1 billion won to 1.2 billion won, and some buyers even come from Suwon looking for listings.”

An international school opening in the area is also drawing interest from young families.

Annie Wright Schools is scheduled to open in Pyeongtaek’s Godeok International New Town in 2028. The school plans to allocate over 30 percent of its domestic student enrollment slots to Pyeongtaek residents.

"Just a few days ago, a researcher at Samsung Electronics with children aged 4 and 6 came looking for an apartment ahead of the children's enrollment at an international school," said a real estate agent surnamed Lee. “Pyeongtaek wasn't known to have a lot of well-known schools, but the establishment of an international school is drawing interest from young married couples in southern Gyeonggi, including employees of large corporations.”

Car dealerships selling luxury imports are also reporting increased visits from semiconductor employees, particularly on the back of industry-specific deals.

“We have recently seen more customers in their late 30s to mid-40s who appear to work for Samsung Electronics and SK hynix,” said a dealer surnamed Choi at a dealership in Bundang. “Employees at large companies that have employee discount agreements bring us proof of employment, and nine out of 10 are from semiconductor companies.”

"We are running a 1.5 percent discount promotion for Samsung Electronics and SK hynix employees," said another dealer. "Customers from semiconductor companies tell us they came to look for models more expensive than the vehicles they had originally planned to buy because of the performance bonuses.”

The spending spree could also spill into household appliances and other retail sectors.

“Semiconductor company employees who are set to receive performance bonuses worth hundreds of millions of won are entering the housing market, further backed by company loan programs and other financing options,” said Kim Sang-bong, a professor of economics at Hansung University. “We can also expect a ripple effect in consumption of relatively expensive durable goods such as televisions.”

BY OH SAM-GWON, LEE GYU-RIM [[email protected]]