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South Korea to Create 'Future Response Fund' Using Chip Tax Windfall

It aims to convert extra semiconductor tax receipts into long-term industrial investment plus targeted housing and job support for young people.

Overview

  • The presidential chief of staff announced Sunday that the government will set up a 'Future Response Fund' financed by extra tax revenue from the booming semiconductor sector.
  • Officials said the fund will back three linked megaprojects — advanced semiconductors, physical AI and AI data centres — and finance measures to reduce K-shaped inequality.
  • Prime Minister Han Seong-sook and ruling-party leaders pledged coordinated legislative and budgetary support to speed implementation and to work closely with private investors.
  • Key details remain unresolved, including the fund's size and governance, exact project sites and phased budgets, and practical needs such as large supplies of electricity, industrial water and skilled workers.
  • The plan bundles very large corporate investment pledges with public backing to make South Korea a long-term tech hub, and its success will hinge on concrete project plans and parliamentary approval.