South Korea is exploring the creation of a new investment fund backed by excess tax revenue from its booming semiconductor industry, as the government looks to redirect AI-driven chip profits into long-term economic growth. President Lee Jae Myung's chief of staff, Kang Hoon-sik, said the fund would use additional tax receipts to support major future-focused investments, including the country's three mega projects, new growth engines, housing, startups, jobs for younger people, and efforts to address K-shaped polarization.
Samsung Electronics (SSNLF), South Korea's leading electronics and semiconductor company, and SK Hynix (HXSCL), a major Korean chipmaker, are at the center of this opportunity as surging AI demand strengthens earnings expectations across the sector. Analyst estimates suggest the two companies could collectively generate more than 100 trillion won, or $65 billion, in annual corporate taxes, a figure Seoul had previously expected from its total 2026 corporate tax collection. The proposal comes as South Korea pushes deeper into semiconductors, physical AI, and data centers, with at least 1,350 trillion won, or $880 billion, in investments expected from companies including Samsung and SK Hynix.
For investors, the development suggests South Korea's AI-driven market story may be shifting from a pure earnings narrative into a more policy-linked growth strategy. Saxo Markets strategist Charu Chanana said the proposed fund is not negative, but noted that Korea is becoming a more policy-driven story as it recycles the chip and AI tax windfall into future growth. The Kospi Index briefly fell as much as 3.7% Monday, as traders pointed to profit-taking and caution ahead of Samsung Electronics' preliminary earnings due Tuesday. The fund still requires parliamentary approval, and key details such as its purpose, permitted use, and management remain undecided, leaving investors to weigh both the long-term growth ambition and the near-term policy uncertainty.