Photo: Tima Miroshnichenko / Pexels
The world's memory chip powerhouse is minting semiconductor millionaires while its demographic clock ticks toward a crisis that could undercut long-term growth.
South Korea is sitting on one of the most paradoxical economic situations in the developed world. Its semiconductor giants are riding the AI wave to record profits, but Goldman Sachs is warning that the country’s rapidly shrinking and aging population could prevent those gains from translating into broad-based prosperity.
The country entered “super-aged” status in 2024, meaning over 20% of its population is now 65 or older. By 2050, it’s projected to be the second-oldest economy on the planet, trailing only Hong Kong.
The boom that stays at the top #
Samsung Electronics and SK Hynix dominate the market for high-bandwidth memory chips, the silicon that makes large language models possible. Operating profits at both companies have surged, and chip workers have reportedly received bonuses equivalent to roughly 3,000% of their monthly salaries, translating to payouts around $400,000.
Goldman Sachs projects what it calls an “AI-driven super surplus” for Korea’s current account, expected to exceed 10% of GDP in 2026.
But the wealth is pooling at the top. Elderly poverty rates remain high, domestic demand is stagnant, and the financial windfall from AI hasn’t meaningfully reached ordinary Korean households.
A fertility rate that defies gravity, in the wrong direction #
South Korea’s fertility rate is projected to fall to approximately 0.80 in 2025, making it the lowest in the world by a wide margin. A slight recovery to 0.9 is expected in 2026. Goldman’s GS SUSTAIN report flags the decline in “core consumers,” the 35-to-55 age bracket that drives most household spending, as a structural headwind for product demand across multiple sectors.
The old-age dependency ratio is climbing fast. Fewer workers supporting more retirees means less disposable income, lower consumption, and a shrinking domestic market.
Trillion-dollar bets meet shrinking workforce #
In June 2026, the South Korean government unveiled plans for nearly $1.2 trillion in public-private investments targeting semiconductor fabrication facilities and AI data centers. That figure represents roughly two-thirds of the country’s entire GDP.
Part of the plan includes channeling semiconductor tax revenue into youth employment and housing programs. However, data from the Bank of Korea shows that youth employment in AI-exposed sectors fell by 285,000 between June 2022 and June 2026, with 94% of the decline concentrated in IT services and programming.
What investors should watch #
Goldman’s warning highlights a longer time horizon than most market participants are pricing in. The current account surplus and semiconductor profits look spectacular in 2026. The concentration of wealth within a single industry also creates fragility, compounded by rising income inequality, elevated elderly poverty, and declining youth employment in tech.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our