South Korea has proposed an 821 trillion won ($598.79 billion) national budget for 2027, including 2.6 trillion won in special funding for the semiconductor industry and 3.4 trillion won for a nuclear-powered submarine program and other strategic weapons. The proposal requires parliamentary approval. The semiconductor allocation is part of President Lee Jae Myung’s broader effort to turn chip-related tax windfalls into longer-term industrial infrastructure, including semiconductor manufacturing, AI data centers and government-designated physical AI projects. Earlier plans also included large-scale investments in memory fabrication, packaging hubs and data centers. Lee said the economy had reached a point where an interest rate increase was unavoidable, warning that higher borrowing costs could weaken growth potential and hurt socially disadvantaged people, and asked parliament for broad suggestions on the budget.