(Bloomberg) — South Korea unveiled a $19 billion stimulus package to bolster its chip sector, a boon for Samsung Electronics Co. and SK Hynix Inc.
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The 26 trillion won program includes 17 trillion won in financial support for certain investments, as well as tax incentives, the presidential office said in a statement. The total is more than double the 10 trillion won that Finance Minister Choi Sang-mok proposed less than two weeks ago.
Samsung shares reversed earlier losses to gain as much as 1.4% in Seoul following the announcement. Other semiconductor stocks rose in Asia after Nvidia Corp’s earnings boom. SK Hynix shares extended their morning gains and rose about 3% following the news.
The record-breaking program follows calls to support the local chip industry, as governments from the U.S. to China spend billions to attract and boost manufacturing projects from companies like Taiwan Semiconductor Manufacturing Co. and Intel Corp. threaten to restrict the global supply of critical components for most modern devices and the military.
Korea, the world’s biggest producer of memory chips, has long favored private conglomerates such as Samsung and SK to lead investment efforts. But the government is now playing a more active role and has spearheaded plans to build a mega-cluster of chip factories located outside of Seoul.
Read more: Global chip battle intensifies with $81 billion subsidy hike
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