At a time when chip and memory companies are disproportionately receiving the benefits of hundreds of billions in capex, and a growing number of politicians are consider ways to socialize these outsized gains, Yonhap News reported that South Korea plans to create an investment fund using tax revenue from its burgeoning semiconductor industry to finance long-term economic growth.

In a senior-level meeting of the government and the ruling party, presidential chief of staff Kang Hoon-sik said the additional revenue from the country’s chip industry should be invested for future growth, the news agency reported.

“By launching the fund with the extra tax revenue, we aim to make bold investments for the future, including supporting the three mega projects, creating future growth engines, addressing K-shaped polarization, and supporting housing, startups and jobs for those in their 20s and 30s,” Kang said.

South Korea recently unveiled its three mega projects initiative, which involves significant investment in semiconductors, physical AI and data centers.

Investments of at least 1,350 trillion won ($880 billion) from companies including Samsung Electronics and SK Hynix will be made, as the government looks to strengthen the country’s long-term competitiveness and position itself as an AI powerhouse.

Samsung Group and SK Group said they plan to build two chipmaking plants apiece in the southwest for a total of 800 trillion won, to rapidly expand production capacity to meet increasing demand. South Korea also announced 550 trillion won of investment from companies including internet leader Naver Corp. to build 8.4 gigawatts of AI data-center capacity by 2029.

The country aims to double its memory production capacity within five years and secure world-class manufacturing capabilities to pull far ahead of competing nations, the industry ministry said in a statement. South Korea must move faster than its global rivals to secure leadership in chips, data centers and physical AI, President Lee Jae Myung said at a briefing where he called the Samsung and SK Hynix leaders “national heroes.” 

Kang said the mega projects will help create new growth engines to determine the country’s future over the next 20 to 30 years, Yonhap added.