South Korea flags a record $530bn budget, paid for by the AI chip boom

South Korea will draw up record budget spending of more than 800 trillion won ($530.97bn) for fiscal 2027, supported by stronger tax revenues from the booming AI chip industry, the government said on Monday.

It is the clearest sign yet that Seoul intends to spend the semiconductor windfall rather than save it, an argument the country has been having since it floated a ‘future response fund’ built on chip tax receipts earlier this month.

Budget Minister Park Hong-keun, speaking at a national fiscal strategy meeting, said the plan would be financed through higher tax receipts and expenditure cuts. The proposal compares with this year’s 727.9 trillion won spending plan, excluding supplementary budgets.

Three “mega-projects”, covering chips, AI data centres and physical AI, will receive top fiscal priority. The government said it would secure the funding capacity through a major restructuring of existing programmes rather than relying solely on the extra...

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