Kim Yong-beom Predicts Record Surplus Revenue Amid Semiconductor Boom

Kim Yong-beom, head of the Presidential Policy Office, stated that the ongoing semiconductor boom is expected to generate record surplus revenue over the next two years, emphasizing the need for a more flexible approach in fiscal policy.

According to Yonhap News on May 10, Kim made these remarks in a Facebook post titled "KOSPI 7500 and the Threshold of 10,000" on May 8. He noted, "South Korea's fiscal and macroeconomic outlook is based on GDP growth forecasts, but the current semiconductor boom is difficult to capture within the existing GDP framework."

He continued, "In industries like semiconductors, where quality improvements outpace price changes, existing statistical systems reflect real changes too slowly. The key point is the fiscal aspect. If the semiconductor boom continues until 2027, the revenue for 2026-2027 is likely to reach historic levels."

Kim identified factors contributing to surplus revenue, including corporate taxes from Samsung Electronics and SK Hynix, income taxes from high-earning workers in the semiconductor sector, and the ripple effects of an expanding trade surplus. He stated that if these effects accumulate, "we could see an unprecedented surplus revenue."
Kim believes that the revised outlook for 2026, expected in the second half of this year, will serve as a critical turning point. He emphasized, "The level to which the forecast rises will alter the direction of revenue estimates and overall budget for 2027."

He also referenced past failures in revenue forecasting, pointing out that during the semiconductor boom following the COVID-19 pandemic in 2021-2022, record surplus revenue was generated, but revenue forecasts and budgets did not adequately keep pace with reality. He added that in 2023-2024, a downturn in the semiconductor market led to a revenue shortfall.

"After a boom comes a revenue shortfall, and after a downturn, surplus revenue appears," he diagnosed, noting that revenue and budgets tend to lag behind actual industry cycles.

He cautioned that the scale of the current cycle could be much larger than before, and relying solely on past methods could lead to greater discrepancies. He urged a shift away from traditional thinking tied to historical averages, advocating for a more flexible and broader approach to fiscal policy in light of the structural changes centered around semiconductors.