South Korea announced plans to offer tax breaks to chipmakers and other technology firms that invest in the country.
According to the proposed plan, companies that make capital investments in the United States could receive a tax deduction of up to 35%.
According to the finance ministry, this will save companies more than 3.6 trillion won ($2.82 billion) in tax payments by 2024.
South Korea, home to Samsung, the world's third-largest chipmaker, said the planned tax breaks would help the country cement supply-chain security while boosting the economy.
Other countries, including Taiwan, which is home to the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co Ltd (TSMC), and the United States, have announced plans to bring chip production onshore in order to strengthen the domestic industry.
The South Korean finance ministry added that the tax breaks were subject to approval by the opposition-dominated parliament.