South Korea to launch multi-billion dollar chip fund to boost semiconductor hubs

South Korea is betting big on its chip industry, again. The country announced the creation of the Future Response Fund on July 5, a new vehicle designed to funnel surplus tax revenues from its booming semiconductor sector back into strategic investments in chips, physical AI, and AI data centers. The fund is part of a broader investment push that combines public and private capital totaling at least $880B, anchored by commitments from Samsung Electronics and SK Hynix. How the fund works South Korea’s top memory chip manufacturers are projected to generate corporate tax revenues exceeding $65B annually. Rather than let those windfalls sit in general government coffers, Seoul wants to convert them into long-term strategic bets on the technologies it believes will define the next decade. The fund will target three areas: semiconductor technology advancement, physical AI development, and AI data center buildouts. Legislation to formally establish the fund is expected to be presented to parliament in August, with a potential operational launch by December. The total size of the fund will ultimately depend on realized tax revenues and parliamentary approval. Samsung and SK Hynix are also...