Key facts
- South Korea will establish a 'future response fund' to utilize increased tax revenue from its AI chip sector.
- The fund aims to finance public projects such as semiconductor infrastructure, housing, and job creation for young people.
- Samsung Electronics and SK hynix have experienced record profits, contributing significantly to the government's tax income.
- The government plans to allocate funds towards essential utilities like power and water for chip manufacturing facilities.
- Samsung shares increased by over 170% and SK Hynix shares by over 300% in the first half of the year.
South Korea is establishing a dedicated state fund, the 'future response fund,' to channel increased tax revenue from its booming AI chip industry into public projects. This initiative aims to reinvest proceeds into semiconductor infrastructure, address housing needs for young people, and create jobs. The significant tax receipts stem from record profits of memory chip giants Samsung Electronics and SK hynix, whose products are essential for AI data centers. Both companies have seen substantial stock price surges, with Samsung shares climbing over 170% and SK hynix shares rising more than 300% in the first half of the year, pushing their combined market valuation past $1 trillion.
Presidential chief of staff Kang Hoon-sik announced the plan, emphasizing strategic use of the revenue for national development. The fund will finance large-scale AI and semiconductor projects, tackle inequality, and support younger generations with housing, start-up initiatives, and employment. Kang also indicated that funds would ensure adequate power and water for chip manufacturing plants. Presidential policy chief Kim Yong-beom had previously suggested uses including support for start-ups, young people, rural communities, and artists. Samsung recently averted a major strike by agreeing to a bonus with its largest union, reflecting positive labor relations amid the sector's robust performance.