Seoul, Aug 21: South Korea is turning the country’s semiconductor boom into a long-term investment plan, with the government announcing a new Future Response Fund to use additional tax revenue generated during periods of strong economic growth.
Pic Credit: Pexel
The fund will receive tax revenue collected above the country’s long-term growth trend. The money will be used to support artificial intelligence, advanced industries, regional development, education and young people.
The strong global demand for AI chips has boosted the earnings of major South Korean chipmakers, increasing corporate profits and government tax collections.
The government plans to use the fund for programmes related to youth employment, housing, asset building, education and talent development, while also supporting new growth industries.
Officials said the fund will act as a financial reserve. During periods of strong tax collections, additional revenue will be saved, while the fund can be used later if government revenue falls below its long-term trend.
The government is expected to submit legislation for the fund along with its 2027 budget proposal. Media estimates suggest the fund could eventually exceed 100 trillion won.
The initiative aims to ensure that South Korea uses the current AI and semiconductor boom to strengthen its economy and create opportunities for future generations.