South Korea plans to invest excess tax revenue generated from its booming semiconductor industry into new growth engines.
A top government official said on Sunday it was aimed at supporting the younger generation and addressing growing inequality, Yonhap news agency reported.
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Presidential Chief of Staff Kang Hoon-sik said the “Future Response Fund” will help finance major national investment projects and strengthen the country’s long-term competitiveness.
Speaking at a meeting between the government and the ruling Democratic Party, Kang said South Korea should not “waste” the extra tax revenue generated from the semiconductor boom.
The fund will support three “mega projects” of the government, he said, referring to massive investments in semiconductors, physical AI and AI data centres.
The aim, he said, was to create new growth drivers and respond to what he described as “K-shaped” economic polarization. It will also provide housing as well as startup and employment support for people in their 20s and 30s.
“The three megaprojects mark the beginning of a new balanced national development paradigm based on cooperation between the private and public sectors,” Kang said.
Kang described the fund as a “cornerstone” of President Lee Jae Myung’s goal of making South Korea “irreplaceable” globally.
The government says the projects, backed by hundreds of billions of dollars of planned investment from Samsung Electronics, SK Hynix and public agencies, aim to strengthen South Korea’s leadership in chipmaking and AI while boosting economic growth beyond the Seoul metropolitan area.
Prime Minister Han Sung-suk said the project will help open a new era of development for the country compared to vehicle expressways and high-speed digital networks in the past.
“If the party, the government and the presidential office work as a team, we can deliver meaningful results,” Han said.