Korea's 2 major chipmakers reject KEPCO's proposal to prepay 5 years of electricity bills

Two leading Korean chipmakers, Samsung Electronics and SK hynix Inc., have declined a proposal from state-owned Korea Electric Power Corp. (KEPCO) to prepay the electricity bills for the next five years, according to industry sources. Debt-laden KEPCO had suggested that Samsung Electronics pay 20 trillion won ($14.8 billion) and SK hynix 5 trillion won in advance, representing roughly five years of electricity bills based on the companies' payments from the previous year.

Following internal reviews, both companies concluded that accepting the proposal would be challenging. The decision underscores their concerns over committing such a substantial sum upfront, given the uncertainty surrounding the semiconductor industry's ongoing artificial intelligence (AI) boom. Although the proposed prepayment scheme might have facilitated the development of power infrastructure for semiconductor facilities under construction in Yongin, south of Seoul, and the southwestern Honam region, the firms seem to have opted against it.