South Korea plans record $530bn budget fueled by AI chip boom
South Korea plans to draft a record budget of over 800 trillion won ($530.97bn) for fiscal 2027, funded by surging tax revenues from the booming AI semiconductor sector. The expansionary plan prioritizes three major megaprojects covering chips, AI data centers, and physical AI systems. To secure funding without relying solely on volatile chip profits, the government will execute a massive 50 trillion won spending restructuring of underperforming programs. Combined operating profits at industry leaders Samsung Electronics and SK Hynix are projected to exceed 600 trillion won this year, up from 90 trillion won previously. However, economists warn that writing a national budget based on cyclical profits is a risky bet if the global AI infrastructure wave experiences a sudden downturn.