South Korea is weighing the creation of a new investment fund backed by excess tax revenue from its booming semiconductor industry, as policymakers look to convert the AI chip boom into longer-term economic growth. Samsung Electronics (SSNLF), South Korea's largest electronics and semiconductor company, and SK Hynix (HXSCL), a major South Korean memory chipmaker, are both expected to report record operating profits that could together generate more than 100 trillion won, or $65 billion, in annual corporate taxes, according to analyst estimates cited in the source.
President Lee Jae Myung's chief of staff, Kang Hoon-sik, said Sunday that the government aims to use the additional tax revenue to make bold investments in the future, including support for South Korea's three mega projects, future growth engines, housing, startups and jobs for people in their 20s and 30s. The proposal follows Seoul's announcement last week of a major initiative focused on semiconductors, physical AI and data centers, with at least 1,350 trillion won, or $880 billion, expected from companies including Samsung and SK Hynix, including new chip plants in the country's southwest.
Details of the fund, including its potential size and management structure, have not yet been released, and any formal proposal would likely require legislative approval. Still, investors may view the plan as an important sign that South Korea wants to reinvest the semiconductor windfall into infrastructure and future competitiveness, especially as part of the excess tax collection may be used to expand electricity and water supply for chip plants while Seoul works to position itself as an AI powerhouse.