South Korea announced plans on Tuesday to offer tax incentives to chipmakers and other tech companies that would invest at home.
Companies making capital investment at home would be given up to a 35% tax deduction according to the proposed plan.
That would help companies save more than 3.6 trillion won ($2.82 billion) in tax payments in 2024, the finance ministry said in a statement.
Home to Samsung, the world’s third-largest chipmaker, South Korea said the planned tax breaks would help the country cement the security of its supply-chain security while boosting the economy.
The move comes after other countries, such as Taiwan, home to the world’s largest contract chipmaker Taiwan Semiconductor Manufacturing Co Ltd (TSMC), and the United States announced plans to bring chip production on shore and bolster the domestic industry.
The South Korean finance ministry added that the tax break plans were subject to approval by the parliament, which is dominated by the opposition.
- Reuters, with additional editing by Vishakha Saxena