Advisor Facebook Post on Chip Tax Idea Triggers KOSPI Drop

On May 12, 2026, a Facebook post by presidential policy adviser Kim Yong-beom prompted a sharp selloff in South Korean stocks. The KOSPI fell as much as 5.1% intraday and finished the day about 2–3% lower after officials issued clarifications.

Kim proposed a citizen dividend financed by redirecting tax receipts tied to profits from the semiconductor and artificial intelligence sectors. He compared the idea to Alaska’s Permanent Fund, which shares oil revenues with residents, and published the concept on his personal Facebook account.

Large chipmakers led the market reaction. Samsung Electronics and SK Hynix were among the biggest decliners, triggering broad selling of listings that account for a major share of KOSPI market value. Traders cited concern that reallocating corporate-linked tax revenues into direct payments could lower companies’ after-tax income and put pressure on valuations.

The President’s Office said the Facebook post represented Kim’s personal view and not government policy. That clarification reduced volatility and helped the index recover from its intraday lows, though the market still closed down.

Kim’s proposal did not call for new corporate levies in the post. It described using existing tax revenues tied to AI and semiconductor profits to fund a universal payment to citizens. The post included no legislative details or implementation plan.

South Korea’s semiconductor industry is a major export sector, with semiconductor exports of $141 billion in 2025. Foreign investors hold a sizable portion of South Korean equities, and market participants have in the past adjusted positions quickly when policy risk rises.

Policy analysts and tax experts said any formal proposal would require clear rules on revenue sources, beneficiary eligibility, administration and the long-term fiscal effects. They emphasized that legal and tax frameworks would need to be defined before lawmakers could consider enactment.

Market participants noted that commentary from senior officials can move prices in a market concentrated in a few export-driven firms. Officials moved quickly to clarify intent after the post to calm investor concerns.