Investing.com -- Semiconductor stocks declined Tuesday after South Korean policymakers proposed a "citizen dividend" funded by taxes on AI profits, sparking concerns about potential levies on chipmakers.

Samsung Electronics (KS:005930) fell 4%, while SK Hynix dropped 4%. In the US, Micron Technology (NASDAQ: MU) declined 2.3%, SanDisk (Nasdaq: SNDK) fell 3.3%, Nvidia (NASDAQ: NVDA) slipped 0.75%, and Advanced Micro Devices (NASDAQ: AMD) dropped 2%.

The selloff followed comments from Kim Yong-beom, South Korea’s presidential policy chief, who suggested in a Facebook post that the nation should distribute dividends to citizens using taxes on AI profits. The proposal initially sent the Korean benchmark Kospi index down as much as 5.1%, wiping out more than $300 billion in value.

Kim later clarified he wanted to tap "excess tax revenue" generated from the AI boom rather than implement a new windfall tax on corporate profits. An official at the president’s office said Kim’s remarks represented his personal opinion and weren’t part of formal discussions. Following the clarification, Samsung and SK Hynix recouped some of their losses, with the Kospi closing down 2.3%.

"Some big overnight market moves came with a sharp drop in the KOSPI as a senior official floated the idea of a ’citizen dividend’ on AI profits, which has also weighed on tech sentiment overnight," Deutsche Bank analyst Peter Sidorov commented.

The proposal reflects growing pressure in South Korea for industry leaders to share gains from the global AI infrastructure boom. While Kim’s ideas remain preliminary, the market reaction highlighted investor sensitivity to potential profit-sharing measures targeting AI beneficiaries.