South Korea plans to establish a 100 trillion won ($72.28 billion) Future Response Fund to capture tax windfalls from its semiconductor boom and redirect proceeds toward youth programs and artificial intelligence investment.
The fund will be financed primarily by excess tax revenue collected when receipts exceed a benchmark tied to the average growth in domestic tax receipts over the past decade, finance ministry officials said. The mechanism allows the government to accumulate surpluses in strong years to offset weaker revenue periods.
Legislation for the fund will be submitted to parliament next month alongside the 2027 budget proposal, according to a Friday announcement by the budget ministry. The initiative follows a July report showing youth unemployment rose to 6.8%, underscoring labor market challenges.
Proceeds from the Future Response Fund will support employment initiatives, housing assistance, asset-building programs, marriage incentives and childbirth support to address low birth rates and structural employment barriers facing young South Koreans. Additional allocations will target AI development, regional economic growth, talent cultivation, higher education and lifelong learning.
The government’s focus on AI aligns with surging demand for semiconductors driven by global AI expansion, which has boosted earnings at major South Korean chipmakers such as Samsung Electronics and SK Hynix. The fund’s size could exceed 100 trillion won based on projections of next year’s tax revenue and other inflows, though the government has not issued an official estimate.
The exchange rate used in the announcement was $1 = 1,383.5000 won.
