On November 2, 2026, South Korean President Lee Jae Myung presented a budget plan for 2027 amounting to 820.9 trillion won ($610.14 billion), marking a 12.8% increase from the previous year. This budget includes a substantial allocation of 21.3 trillion won for semiconductors and AI infrastructure, nearly double the previous year's funding.
Additionally, 4.7 trillion won is earmarked for developing a high-performance sovereign AI model. The government aims to cultivate talent by training 2,000 specialists in semiconductor design and enhancing AI education through partnerships with universities and companies like Samsung Electronics and SK Hynix.
The budget is designed to maintain stable government debt levels, with new bonds issued to refinance existing debt. Alongside these investments, defense spending will rise by 8.2% to 73.3 trillion won, focusing on integrating AI and robotics into military capabilities.
This ambitious budget comes as the IMF projects a 3.3% growth for South Korea's economy in 2026, driven largely by a surge in semiconductor exports, which reached a record $115.3 billion in October 2026, contributing to a $42.5 billion trade surplus.
The government's focus on AI and semiconductors is expected to bolster South Korea's position in the global market, potentially leading to $1 trillion in annual exports