Higher tax revenues from the booming AI chip sector have enabled South Korea to propose its largest-ever national budget, with major investments planned for semiconductors, AI and data centres.
South Korea has proposed a record 2027 national budget of more than 800 trillion won (US$530.97 billion), supported by stronger tax revenues generated by the country’s fast-growing artificial intelligence (AI) chip industry.
According to Reuters, Budget Minister Park Hong-keun said the spending plan will be financed through higher tax collections and expenditure cuts. The proposed budget compares with this year’s spending plan of 727.9 trillion won, excluding supplementary budgets.
The government said three “mega-projects”, covering semiconductors, AI data centres and physical AI will receive top fiscal priority. Funding will come from restructuring current spending programmes rather than depending solely on additional tax revenue.
President Lee Jae Myung said the government would use every available measure to ensure corporate investment projects move ahead as planned. “Additional tax revenue coming at this time is a precious resource to be used at a golden time when global AI dominance will be determined,” Lee said.
Park added that the government aims to restructure around 50 trillion won in spending roughly double last year’s level by reviewing discretionary and mandatory expenditure and cutting underperforming programmes.
The government also plans to establish a Future Response Fund, which will invest tax revenue exceeding long-term trends in four priority areas: youth, growth engines, regional development and talent.
The proposal underscores South Korea’s strategy of using the AI-driven semiconductor boom to strengthen public finances while accelerating long-term investments in strategic technologies.
