South Korea Unveils Record 821 Trillion Won Budget for AI and Semiconductors

South Korea announced a record 821 trillion won government budget for 2027, representing a 12.8% increase over 2026. The budget expansion is funded largely by record tax revenues from memory chip giants Samsung Electronics and SK Hynix driven by global AI demand. This aggressive spending plan shifts South Korea away from fiscal austerity toward strategic state-backed investment in critical tech infrastructure. It demonstrates how national economic performance in the AI era is tightly coupled with semiconductor market dominance. The proposed budget allocates 21.3 trillion won toward next-generation semiconductor infrastructure like power grids and industrial water, alongside 2.6 trillion won for dedicated chip R&D. Driven by projected corporate tax revenues of 216.7 trillion won, South Korea expects its government debt-to-GDP ratio to drop from 51.6% to 48.3%.