Samsung, SK Hynix reject KEPCO’s $23 billion power prepayment proposal, document shows

Samsung Electronics and SK Hynix have declined a proposal from Korea Electric Power Corp to make a 25 trillion won ($18.7 billion) initial payment to support electricity for upcoming semiconductor manufacturing facilities, according to a document provided to a lawmaker. The two tech giants stated to the state-run utility company that they found it challenging to accept the proposal following their internal assessments, as reported by Reuters through the office of lawmaker Lee Chul-gyu.

Both companies expressed uncertainty about the necessity of such substantial upfront payments, citing concerns over the long-term stability of semiconductor market demand. A company representative in Seoul, speaking on the condition of anonymity due to the sensitivity of the topic, confirmed this information. Samsung and SK Hynix chose not to offer any further comment on the matter.

Earlier this month, South Korean newspaper Chosun Ilbo had reported that KEPCO had suggested the chip manufacturers make the large advance electricity payment to enable the utility company to invest in necessary infrastructure to power the new chip fabrication plants.