South Korea plans to provide tax incentives and financial support to makers of automotive chip parts and other key parts and materials, the finance minister said Tuesday.

Hong Nam-ki said the country plans to offer support to corporate projects to develop eight key parts and materials, including automotive chip parts and rare-earth permanent magnets used for electric vehicles.

Hong said at a meeting on the parts and material industries that the move will help attract private investments worth 140 billion won ($125 million) by 2025 and create more jobs.

South Korean automakers have suffered a global shortage of automotive chips, with some companies being forced to temporarily suspend their production lines.

South Korea, home to Samsung Electronics Co. and SK hynix Inc., is a powerhouse of memory chips, which account for around 20 percent of the country's outbound shipments.

But the Korean firms have not produced auto chips as they are considered less profitable due to a completed qualification process and rigid quality requirements. The companies have also relatively lagged behind in developing non-memory chips, including system chips. (Yonhap)