“Director-General, before we begin the meeting in earnest, there’s something I’d like to say.”
“Go ahead.”
“Winter is coming.”
The second meeting, held at the Yeouido Securities Center.
Choe Ho-yeong opened with a chilling declaration right from the start.
“This isn’t just idle complaining. Winter really is coming.”
“You mean there’s a crisis?”
“Yes. China’s rise in memory semiconductors is no ordinary matter. HP and Dell have already begun reviewing Chinese-made DRAM. We absolutely cannot feel safe about the HBM market either. Recently, Chinese technology has closed the gap with us to just three years. Thirty years ago, our semiconductor industry was hopelessly far behind Japan’s, and yet we overtook them. Is there any guarantee China won’t do the same to us?”
What he said was true.
China’s technology, which was constantly eyeing supremacy in AI, was no joke. They had boosted their semiconductor capabilities not only with massive government support, but also by mobilizing industrial spies when necessary. Setting aside whether their methods were honest or not, it was true that their technology was hot on our heels.
“What frightens me most of all is the U.S. government’s reaction. As HBM prices have surged lately, they’ve been expressing displeasure toward Korea through various channels.”
“Concern over strategic assets?”
“Yes. To be honest, are there really allies in economics? It was American companies that leaked our display technology to China and drove down unit prices. I think semiconductors will be the same. If HBM keeps soaring, the U.S. will secretly want us and China to compete on price, won’t they?”
“That makes sense. So what is it you want to say, Director Choe?”
He spoke as if it were obvious.
“This National Growth Fund portfolio must be centered on semiconductors, no matter what. We cannot afford to let our guard down.”
At that signal, all the committee members rose up in agreement.
—That’s right, Director-General. Even considering not only technological capability but potential returns, it has to be semiconductors.
—If you compile what the top ten domestic asset managers and the top five overseas rating agencies are saying, they all say our semiconductors have the highest growth potential.
—Putting everything else aside, shouldn’t we be faithful to our original mission? For a fund, returns come first. We should invest in the ones that are going to make it.
Their sharply honed gazes seemed to be aimed at someone in particular.
“...”
Me.
At the first meeting, I had lightly mentioned “bio,” and it seemed that had put them on guard.
“I understand what you’re all saying. But from a risk management perspective, we cannot concentrate everything in one asset. And it is also the government’s wish that this growth fund bring benefits to SMEs.”
“We actually discussed that among ourselves because of that very issue. Director, why don’t we just make it look like we’re doing that?”
“Make it look like it?”
“I’m saying we should fill the KOSDAQ or venture portion with subcontractors that ultimately benefit from semiconductors. The last materials, parts, and equipment fund achieved returns in the 40% range and was the most successful government fund case, and if you look at its composition, all of them were industries related to semiconductors. Let’s actively benchmark that success story.”
“I see... Then, does anyone have a different opinion?”
Enduring the stinging glares, I opened my mouth.
“Director-General. The purpose of the growth fund is not to simply create a high-return fund. It is to invest dormant money into productive finance. As such, Korea’s vulnerable industries must also be included in this portfolio.”
No sooner had I finished speaking than Choe Ho-yeong scolded me.
“Team Leader Lee Se-jun, are you going on about bio again?”
“...It’s a field with prospects. It’s also an industry Korea desperately needs, given its unusually rapid aging.”
“Oh, is it? Then why has that promising field been sluggish for three years? As far as I know, even while the KOSPI doubled, those stocks fell even further.”
“It’s true that they’re still lacking, but...”
“No. That means they have no prospects.”
At his rebuke, all the committee members rose up again.
—Director Choe said it well. Team Leader Lee, that’s enough. The domestic bio industry has been in decline for ages.
—These days, not even theme-driven hype blows through the bio sector! Market expectations aren’t merely absent; they’ve been shattered!
—We’re already busy enough pushing investment funds into the winners, so why does Team Leader Lee keep saying such absurd things?
I smiled bitterly.
“That is precisely why it’s a growth fund.”
—What?
“As you said, the outlook for semiconductors will likely remain good going forward. Even if we include a moderate amount, the returns will be among the best. That being the case, shouldn’t the investment outside semiconductors go into our vulnerable industries?”
—Is that something an investor should say? Since we’re sure to make money on semiconductors anyway, it’s fine to lose some on other investments?
“It’s a long-term investment for our next growth industry. How can the semiconductor cycle possibly remain favorable forever? Since market conditions are good now, we should also nurture the next industry that will feed us.”
Bang!
“Team Leader Lee, I wasn’t going to stoop to saying this, but... At times like this, I suppose you really can’t ignore years of experience. Your thinking is far too naive.”
“What is naive about it?”
“Let’s say the National Growth Fund earns a 20% return. Do you think people will applaud and say we did well? Not a chance! They’ll compare us in every possible way, saying they could have earned 50% if they’d invested directly in companies, but the government fund only made 20%. We absolutely have to meet those heightened expectations!”
He turned his head.
“Director-General, this isn’t even something worth discussing. We shouldn’t respond complacently just because market conditions are good. Precisely because they’re good, we need to think about how to satisfy the public’s expectations. To put it bluntly, the Blue House’s pride is riding on this government fund.”
I didn’t back down either.
“Director-General. The Blue House also pointed out the issue of asset concentration and specifically requested that SMEs benefit. Returns are important for a government fund, but its original role as a public fund is important as well.”
“Are you going to keep being stubborn, Team Leader Lee?! When such a promising industry is right here in front of us!”
“Just a few years ago, that semiconductor industry was in another harsh winter. Thirty years ago, it was outright in the red. Now is precisely the time to seek out the second semiconductor.”
“If you chase a wild rabbit, you’ll lose the tame one too! Do you think we’ve seized total semiconductor supremacy just because the last few years have been booming? China has caught up to within three years of us in HBM technology, and from now on they’ll be closing in even faster. The entire government must throw its capabilities behind us so we can quickly widen the gap into an overwhelming lead!”
“Isn’t that why stock prices have risen this much? Hoam and Hynix have already recorded all-time highs in retained earnings. From here on, it’s the companies’ responsibility. We cannot have even the government fund go all-in on semiconductors!”
After watching the two of us for a long while, the Director-General opened his mouth.
“That’s enough, everyone.”
He let out a sigh.
“Both sides have valid points. Even if the market outlook is bright, the public’s expectations will naturally rise as well, so we certainly cannot feel at ease. But Director Choe... what is Korea’s next source of growth?”
At the uncomfortable question, Choe Ho-yeong immediately narrowed his eyes.
“Pardon?”
“Post-semiconductor... I mean, after the semiconductor cycle. There is nothing eternal in this world. Is it really all right to leave every other industry as it is?”
“Director-General, are you seriously taking his side right now?”
“I am not taking sides. I am asking out of genuinely cool-headed concern as an investor. Microsoft once seemed as though its stock price would rise forever thanks to its Windows monopoly, but it has been struggling lately. Investors are also betting on Gemini to dominate the OpenAI market. Of course, that too may simply be part of the process. Who knows what will happen tomorrow?”
“Director-General!”
“That is what concerns me. Even the mighty Microsoft goes through ups and downs. Is it truly wise for our industrial structure to be concentrated in one thing? The opinion that we should use the money earned from semiconductors to discover the second semiconductor... doesn’t seem entirely wrong to me.”
Bang!
No sooner had he finished speaking than Director Choe slammed the table and rose from his seat.
“I’m disappointed, Director-General. I didn’t know you were this kind of person.”
“What?”
“They say arms bend inward. Are you defending that fellow over a mere personal connection?”
“Now, Director Choe.”
“That’s enough! In such a biased atmosphere, anything I say will only disappoint me further. I’ll be leaving now.”
As he stormed out, the committee members who agreed with him began following him one by one.
Not long after, only the Director-General and I were left in the conference room.
“Ha ha... As expected, now that I’m retired, my clout isn’t what it used to be. I asked not because of personal ties, but because I was truly concerned.”
“...I’m sorry, Director-General.”
“What are you sorry for? I thought what you said had merit too, so I followed your opinion. Still, it seems we’ll have to end today’s meeting here.”
The Director-General smiled bitterly and rose from his seat.
“There’s still time left, so let’s watch a little longer. We’ll try persuading them properly at the next meeting.”
I bowed my head, and on the way back alone, I clenched my fist tightly.
They probably won’t be persuaded. Their opinion that we should focus solely on returns is by no means wrong. If anything, I’m the one being unreasonable.
But if you looked at it purely logically, Korea investing in semiconductors thirty years ago made no sense either. In an era when we couldn’t even make radios as well as Japan, producing better semiconductors than Japan was, from the perspective of the time, an absurd idea.
Plowing up farmland and building highways made no sense either.
Receiving orders first and building shipyards afterward made no sense either.
Producing domestic cars in Korea, and those cars going on to seize third place in the global market, would have made no sense from the perspective of several decades ago.
“...”
There’s no helping it. Even King Sejong, when creating Hunminjeongeum, used his authority to press his ministers down.
If persuasion is difficult, then there is only that method...
*
“That old geezer’s lost all his instincts, hasn’t he?”
After breaking up the meeting, they gathered separately.
Choe Ho-yeong, still unable to calm his anger, cursed the Director-General for quite some time.
—How could he not have? Bio, of all things!
—This must be why retired investors burn through all their retirement funds. Just a few years off, and his investment instincts have fallen that far.
—But what will you do, Director...? The young bastard is one thing, but Director-General Park is the TF head. It seems we’ll have to persuade him somehow.
Choe Ho-yeong spoke as if it were nothing.
“Why persuade him? We just need to drag him down.”
—...Pardon?
“Can you cook good rice without winnowing out the chaff?”
—...You want to cut him loose? How?”
“Do you think I don’t have at least that much of a network? Wait.”
He scrolled through his phone and called some number.
“Ah, yes, party leader. This is Choe Ho-yeong. I’m calling because there’s something urgent I need to tell you... Would you be able to talk?”