KOSPI Drops Below 7000 as Semiconductor Stocks Plummet
Domestic stock markets experienced a sharp decline, primarily driven by a sell-off in semiconductor shares. The KOSPI index fell below the 7000 mark, while the KOSDAQ dropped more than 3%.According to the Korea Exchange, as of 12:40 PM on July 13, the KOSPI was down 497.57 points (-6.66%) at 6978.37.
In the securities market, individual investors made a net purchase of 2.21 trillion won, engaging in bargain buying. However, foreign and institutional investors sold off 1.78 trillion won and 509.7 billion won, respectively, contributing to the index's decline.
Major stocks saw significant losses, particularly in the semiconductor sector. Samsung Electro-Mechanics fell 16.92%, SK Square dropped 14.62%, SK Hynix was down 12.02%, Samsung Electronics decreased by 7.37%, Samsung C&T fell 6.64%, and Samsung Life Insurance dropped 6.02%. Hyundai Motor also saw a decline of 1.31%.
Government to Establish Future Response Fund for Economic Growth
The government announced plans to establish a 'Future Response Fund' utilizing additional tax revenue generated from the semiconductor boom. This fund will focus on investments in four key areas: future development, youth, local economies, and education, aiming to enhance economic growth potential.President Lee Jae-myung mentioned the Future Response Fund during a national fiscal strategy meeting at the Blue House on July 13, emphasizing it as one of three principles for fiscal management in his second year of governance, under the vision of 'Irreplaceable Korea.' This meeting marked the first comprehensive discussion on fiscal management since the current administration took office, with a particular focus on additional tax revenue.
The government plans to create a special law to define 'additional tax revenue' instead of 'excess tax revenue' as stipulated in the National Finance Act, allocating these funds for local balanced development and youth policies. A related committee within the Democratic Party is expected to be established, with specific plans to be revealed around the end of August when the budget for the next year is being prepared.
President Lee stated, "This additional tax revenue will be a valuable resource during a critical time for global AI dominance. To enhance economic growth potential and ensure that benefits are returned to all citizens, a strategic investment platform that guarantees bold and sustained investments is necessary."
Long-Term Treatment Costs Concentrated Among Auto Accident Patients
It has been revealed that treatment costs for auto accident patients are disproportionately concentrated among those requiring long-term care. Among patients who only received traditional Korean medicine, about 10% exceeded eight weeks of treatment, yet they accounted for over half of the total treatment costs.According to the insurance industry on July 13, an analysis of auto insurance claims from major insurers, including Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, and KB Insurance, found that there were 1.226 million patients with mild injuries such as neck and back strains last year. Of these, 1.085 million (88.5%) completed treatment within eight weeks, while 141,000 patients (11.5%) required treatment beyond that period.
The share of treatment costs for long-term patients was significantly higher than their patient numbers. Of the total treatment costs of 998.65 billion won for mild injury patients, 369.03 billion won (37.0%) was allocated to those treated for more than eight weeks, indicating that while they represented only 10% of patients, they received over one-third of the treatment costs.
Ruling Party and Government Discuss Economic Growth Strategies
The Democratic Party and the government have reached a consensus on accelerating economic growth strategies for the second half of the year, focusing on the 'three mega projects' and the Future Response Fund based on excess semiconductor tax revenue.On July 13, a meeting was held at the National Assembly to discuss the '2026 Second Half Economic Growth Strategy,' as President Lee aims to make 2026 a year of significant economic advancement.
The Democratic Party pledged strong legislative and policy support for the three mega projects announced by President Lee.
Acting Party Leader Han Byung-do stated that the party would process the Mega Special Zone Act by the end of the year, emphasizing, "We have established a special committee at the party level, and we will robustly support legislation and budgets. Under the principle of a united party and government, we will take extraordinary measures to ensure economic responsibility."
Education Budget Increases Despite Declining Student Enrollment
"While the number of students in classrooms is decreasing, the budget continues to grow." This paradox is a significant challenge facing South Korea's education finance system. A report released by the National Assembly Budget Office on July 10, analyzing the '2025 Fiscal Year Settlement by Committee (Education and Culture Committees),' starkly illustrates this contradiction.The local education finance grants are budgets provided by the national government to support local governments in establishing and managing educational institutions and administrative bodies to promote balanced educational development. These grants are determined based on domestic tax and education tax revenues, and they are now at odds with the declining student population, raising calls for fundamental reform.
Local education finance grants are distributed to provincial and city education offices and are used in early childhood, primary, and secondary education. The issue lies in the fact that the key indicator for calculating these grants, the number of students in early childhood, primary, and secondary education, continues to decline.
According to the report, from 2016 to 2026, the total number of students is projected to decrease by 15%, reflecting a clear annual decline rate of 1.6%. However, the basic infrastructure in educational settings has been increasing. During the same period, the number of schools and classes increased by 2.5% and 0.2% annually, respectively, while the number of teachers also rose by 5%, with an average annual increase of 0.5%.
SK Hynix Accelerates AI Semiconductor Talent Acquisition
SK Hynix is ramping up its global talent acquisition process to enhance its artificial intelligence (AI) semiconductor technology capabilities, leveraging its recent listing on the Nasdaq. The company aims to attract top talent by offering competitive compensation packages comparable to major tech firms like Nvidia, AMD, and Intel.As of July 13, industry sources indicate that SK Hynix has begun restructuring its hiring practices through its U.S. subsidiary, SK Hynix America, to facilitate the recruitment of global talent. The company plans to offer stock options and performance-based restricted stock units (RSUs) as key incentives to attract core engineers from Silicon Valley.
SK Group Chairman Chey Tae-won also expressed his commitment to talent acquisition shortly after the listing, stating, "Compensation based on Nasdaq-listed stock will be the most intuitive and powerful incentive for global tech talent."
* This article has been translated by AI.
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