Korea plans chip tax Future Response Fund

The Lee administration is moving to create a Future Response Fund that will draw on additional tax revenue generated by South Korea’s recent semiconductor boom. The initiative aims to convert the chip industry’s windfall into public investment, focusing on long-term national growth rather than short-term spending. Officials present the fund as a central plank of the government’s economic strategy in an era increasingly shaped by artificial intelligence and advanced technology.

Presidential Chief of Staff Kang Hoon-sik has said the Future Response Fund will be channelled into artificial intelligence, advanced manufacturing and other long-term growth projects. The plan positions these areas as priority fields for maintaining and enhancing South Korea’s competitiveness. By tying the fund to sectors closely linked to the semiconductor ecosystem, policymakers seek to reinforce technology capabilities that are already benefiting from the current boom.

Kang also described the fund as a cornerstone for backing three flagship mega projects centred on semiconductors, physical AI and AI data centres. These projects are intended to anchor future industrial development, with dedicated financing from the new fund expected to support infrastructure, innovation and deployment in each area.

Beyond large-scale technology investments, the Future Response Fund is planned to provide targeted support for people in their 20s and 30s. Kang indicated that resources would go to housing, startup assistance and employment programs aimed at these younger cohorts. This approach links the semiconductor-driven revenue surge to broader social and labour-market objectives, including entrepreneurship and job creation.

The emphasis on housing and startup support suggests that the fund is being designed not only as an industrial policy tool but also as a mechanism to address challenges faced by younger workers and potential founders. Employment-related measures tied to the fund are intended to align workforce development with the needs of emerging technology sectors.

In parallel with the funding initiative, the Ministry of Employment and Labor plans to host a public social forum in July to discuss how semiconductor excess profits should be distributed. Proposals under review include a citizens’ dividend, which would provide direct payments to individuals, and a Korean-style social solidarity wage, aimed at fostering more equitable income distribution.

Another option under consideration is a sovereign-wealth-fund-style mechanism that would pool semiconductor windfalls into a professionally managed investment vehicle. This would represent an alternative route to using the boom’s proceeds, complementing or potentially overlapping with the Future Response Fund’s objectives.

Officials and ruling party leaders have urged swift cooperation to translate the fund concept and profit-sharing ideas into concrete legislative and budget measures. The combination of a dedicated growth fund and an open debate on distributing excess profits signals an effort to align industrial competitiveness with broader social and economic goals.