South Korea wants to create a public infrastructure fund financed by tax revenues from the artificial intelligence (AI) sector, the presidential office announced Monday, as profits for chipmakers explode in the country.
• Also read: South Korea: Samsung to unveil $650 billion investment plan
• Also read: Samsung: employees vote on an agreement providing record bonuses thanks to AI
Rising global demand for memory chips, used in AI data centers, has helped South Korean semiconductor giants post record profits this year.
The successes of Samsung Electronics and SK hynix, heavyweights in the sector, have notably contributed to increasing the state’s tax revenue.
Shares of Samsung Electronics jumped more than 170% in the first half while those of SK hynix gained more than 300%. The market capitalization of each of these companies exceeded $1 trillion for the first time.
At a meeting between the government and the ruling party on Sunday, the president’s chief of staff Kang Hoon-sik said a “future response fund” would finance large-scale national projects focused on the AI and semiconductor industry.
This fund would also be used to reduce inequalities and support young people in terms of housing, business creation and employment, he added in comments reported Monday to AFP.
“The excess tax revenue generated by the semiconductor boom, at this crucial time for Korea’s future, should not be spent lightly,” he stressed.
He did not specify the amount allocated to this fund, ensuring that the government would examine ways of using these revenues during a national meeting on the budgetary strategy scheduled for later this month.
In an interview with South Korean daily Dong-A Ilbo published on Monday, Kang said the additional tax revenue generated by AI would be used to develop infrastructure dedicated to semiconductors, particularly for their electricity and water supply.
At this point, no bills have been formally introduced to support these proposals.
In May, Presidential General Secretary for Policy Kim Yong-beom suggested using these tax revenues to support start-ups, provide aid to youth, expand basic income programs to rural and fishing communities, and support artists.
Samsung is expected to report another strong quarter on Tuesday, when it announces its preliminary second-quarter results. SK hynix, for its part, said last week it plans to raise 45.45 trillion won ($29 billion) with an IPO on the Nasdaq.
The two companies are involved in a massive 800 trillion won (about $520 billion) public-private investment project, announced last week, to build a new semiconductor manufacturing hub in the country’s southwest.
