Deputy Minister Kim Yong-beom of the Blue House Policy Office's floated idea of a "national dividend (working title)" is sending shock waves through the stock market and the business community. After word spread of his remarks that Korea should discuss ways to return "excess profits" generated by the semiconductor industry in the age of artificial intelligence (AI) to society as a whole, the market interpreted it as the government effectively seeking to take an additional share of corporations' profits.
The Facebook post in which Deputy Minister Kim mentioned the national dividend drew about 300 comments and sparked heated debate. Since the launch of the Lee Jae-myung administration in June last year, it drew the hottest response among posts Kim has uploaded. As of the 13th, the comment section for the post is closed. Based on Kim's post—7,443 characters including spaces, equivalent to five A4 pages—we looked into the background and key issues behind the national dividend idea.
◇ Stock market wobbles on national dividend idea
Deputy Minister Kim Yong-beom of the Blue House Policy Office wrote on Facebook on the night of the 11th, "In the AI era, a portion of excess profits should be returned to the entire public," as he proposed the "national dividend" idea. He said potential uses should be discussed, including youth startups, a basic income program for rural communities, and AI education support.
The market reacted immediately. Investors took it to mean the government might seek to use semiconductor corporations' excess profits as a new source for redistribution. Bloomberg reported, "As market participants tried to parse the intent of Deputy Minister Kim's remarks, the KOSPI index plunged intraday on the 12th," adding that "the drop narrowed somewhat after explanations emerged that the plan was to use excess tax revenue."
At the core of the controversy is that Deputy Minister Kim used "excess tax revenue" and "excess profits" interchangeably in his post. While arguing that "the semiconductor industry can structurally generate excess profits beyond a traditional cyclical industry," he also said Korea should consider how to use the massive tax revenue that would result. The market, however, took this not merely as using tax revenue but as a discussion about distributing corporations' profits themselves.
The business community and investors pushed back, saying, "Excess profits of corporations are, as a matter of common sense, first used for shareholders, executives and employees, and future investments." On Kim's Facebook, comments included, "Even through corporate taxes alone, corporations contribute sufficiently to society," and "Why talk about distribution when the race for R&D investment is in full swing?" Some users went so far as to call it "a socialist idea."
◇ Debate over "assuming a super-boom in semiconductors"… sustainability in doubt
The backdrop for Deputy Minister Kim putting forward such an idea is seen as the possibility of an ultra-large boom in the semiconductor industry. In the securities industry, projections are piling up that Samsung Electronics and SK hynix could post profits at levels hard to compare with the past due to surging demand for AI servers and high bandwidth memory (HBM).
KB Securities on the 11th estimated this year's operating profit at Samsung Electronics at 360 trillion won and SK hynix at around 270 trillion won. The resulting corporate tax expense for the two companies is about 146 trillion won, exceeding by 60 trillion won the government's forecast for total corporate tax revenue this year.
Based on the 2027 earnings outlook by KB Securities, corporate taxes would be 110.949 trillion won for Samsung Electronics and 99.676 trillion won for SK hynix, topping 210 trillion won. If realized, it would usher in an era in which the two companies shoulder nearly half of the nation's entire public finances.
However, there are also cautions that, because this is an optimistic scenario premised on a prolonged AI supercycle, it is difficult to conclude whether it will materialize.
In past semiconductor booms, substantial excess tax revenue also occurred. In 2021–2022, thanks in part to a boom in the semiconductor cycle, the government collected about 110 trillion won in excess tax revenue. But when conditions turned, large tax shortfalls followed from 2023 onward. The cumulative shortfall over the past three years amounts to about 96 trillion won.
For this reason, some criticize Deputy Minister Kim's premise that the semiconductor industry is no longer cyclical as overly optimistic. Given the industry's nature of rapid swings in earnings and tax revenue depending on market conditions, a long-term distribution plan premised on excess tax revenue itself could be unstable.
Deputy Minister Kim also added a caveat: "If excess tax revenue does not occur, the national dividend is an empty tale," while saying, "But if it does, letting the fruits of that excess profit flow away without any principles could be the more irresponsible choice."
◇ Dispute over citing the Norway model… former Chairman Lee Kun-hee also resurfaces
The Norway sovereign wealth fund model, which Deputy Minister Kim cited as an example, also stirred controversy. Kim said, "Norway built a structure that returns oil revenue to society as a whole by accumulating it in a sovereign wealth fund," arguing that Korea also needs to convert structural excess profits into long-term social assets.
The business community countered that "oil revenue, a national resource, and semiconductor profits accumulated by private corporations over decades while enduring R&D investment and losses are of entirely different character." In particular, given that Samsung Electronics and SK hynix secured their current competitiveness by withstanding massive upfront investments and cutthroat competition on the global stage, simple comparisons are misplaced, critics said.
In fact, major countries are expanding support for corporations amid the battle for semiconductor supremacy. The Japanese government decided to provide more than 25 trillion won over five years to the semiconductor corporation Rapidus, and the U.S. government also decided to grant large subsidies for TSMC's local investment. In this situation, there are concerns that Korea's government raising "distribution" first could send the wrong signal to the market.
The debate over distributing excess semiconductor profits has recurred before. The labor union at Samsung Electronics recently mentioned the possibility of a strike while demanding that 15% of operating profit be paid as performance bonuses, and some in politics have argued that the benefits of growth in the semiconductor industry should be used to support rural communities, among other areas.
Amid such controversy, remarks by former Samsung Electronics Chairman Lee Kun-hee during the 2011 debate over an "excess profit-sharing system" are being recalled. At the time, Lee said, "I don't know what that means," and added, "I don't know whether that's a term used in a socialist country or a capitalist country."