South Korea wants to turn a two-company chip profit boom into a permanent public fund, and the numbers behind it are staggering.
Samsung Electronics and SK Hynix just handed Seoul a tax problem most finance ministries would envy: too much money showing up too fast. The AI memory boom pushed Samsung's first-quarter 2026 operating profit to 57.2 trillion won and SK Hynix's to 37.6 trillion won, according to figures reported by StorageNewsletter and the Korea Herald, and second-quarter estimates put the combined total near 150 trillion won, about $96.9 billion, according to BigGo Finance. That surge is expected to push South Korea's national tax revenue to somewhere between 415 trillion and 500 trillion won this year, government officials told local media, with 50 trillion to 70 trillion won of that, roughly $34 billion to $46 billion, counted as a pure windfall tied directly to chip earnings.
President Lee Jae-myung's office wants to bank that windfall rather than spend it down. Presidential Chief of Staff Kang Hoon-sik told reporters the government seeks to establish what he calls a "future response fund," so that additional tax revenue can be used as investment resources for future generations, according to the Korea JoongAng Daily. The pitch, as reported by the Korea Herald, is to steer proceeds toward three mega projects, address the country's widening "K-shaped" polarization between winners and losers of the AI economy, and fund housing, startup and job support for South Koreans in their twenties and thirties.
That's one option on the table. A rival proposal would fold the same money into a broader sovereign wealth fund slated to launch in the second half of 2026, and Seoul Economic Daily reports the debate has widened further to include an excess-profits sharing scheme for the chipmakers themselves and a straightforward citizens' dividend. Nobody in Seoul is short on ideas for what to do with the money. The harder question is whether a windfall this concentrated, coming from two companies in one industry, should be treated as permanent government income at all.
Alongside the broader fund, the Ministry of Science and ICT has floated a narrower carve-out: about 5 trillion won, roughly $3.6 billion, earmarked specifically for a sovereign AI push. That money would go toward buying roughly 10,000 of Nvidia's newest GPU modules and toward building a frontier-class Korean AI model, an effort local reporting has referred to as Mithos. Four teams, LG AI Research, SK Telecom, Upstage and Motif Technologies, have already cleared an initial screening round and are developing candidate models with GPU support from the science ministry.
You don't build a frontier lab for $3.6 billion. What you buy is a seat at the table, and a domestic answer to the argument that Korea's AI ambitions shouldn't depend entirely on chips it manufactures for everyone else's models.
Compare that to the UAE's MGX, backed by oil wealth and already a co-investor in major AI infrastructure deals, or Singapore's Temasek and GIC, both built over decades from trade surpluses and government reserves. Korea's version has a different origin story. It would be funded almost entirely by the export success of two memory chipmakers riding a single demand cycle. Sovereign funds built on oil or diversified trade income can smooth out a bad year. A fund built on Samsung and SK Hynix's DRAM and HBM margins rises and falls with Nvidia's order book and the price of memory.
And that's the tension nobody in Seoul has resolved yet. Samsung and SK Hynix have already committed their own money to this cycle, backing a roughly $576 billion domestic AI-chip investment plan unveiled in late June, according to Business Standard, alongside a $258.4 billion southwest semiconductor buildout reported by BigGo Finance. The state taxes the profit, funnels a share back into AI and startup support, and the chipmakers keep expanding capacity to meet the same demand that generated the windfall in the first place. It's a tight loop, and it works exactly as long as the AI memory boom keeps running.
If it doesn't, the fund's backers will have built a permanent institution on a cyclical profit spike, the same mistake oil states spent decades learning to avoid before they built stabilization mechanisms into their own funds. South Korea hasn't said what happens to the future response fund if Samsung and SK Hynix's margins compress. For now, that question can wait. The tax bill from this boom is already sitting in Seoul's account, and the government would rather decide what to do with it than watch it vanish into next year's budget.
Also read: Alibaba and Tencent Chose to Fund Kling AI Instead of Beating It • Chip stocks tumbled this week as investors doubt the AI spending payoff • Singapore Will Train 60,000 Accountants to Use AI Within Three Years
