Samsung, SK Hynix Reject KEPCO's $18.7 Billion Power Prepayment Plan, Reports Say

Samsung Electronics and SK Hynix have rejected a proposal from Korea Electric Power Corp. (KEPCO) that requested a 25 trillion won ($18.7 billion) advance payment to build out power infrastructure for new semiconductor facilities, according to media reports.

KEPCO's Infrastructure Plan

The state-run utility company had proposed the prepayment structure to finance the substantial infrastructure investments required to supply electricity to new chip manufacturing plants, the South Korean newspaper Chosun Ilbo reported earlier this month. The funds were intended to be used by KEPCO to secure the power grid and related facilities ahead of the new factories becoming operational.

Chipmakers Cite Demand Uncertainty

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Both Samsung and SK Hynix reportedly informed KEPCO that accepting the proposal would be difficult following internal reviews, according to reports from Reuters and other Korean media. The companies expressed reservations about the necessity of such a large upfront capital outlay.

Key concerns cited by the chipmakers included uncertainty surrounding the long-term stability of global semiconductor demand. The rejection highlights the financial and logistical challenges involved in the massive expansion of chip production, where the cost and timing of essential infrastructure like power supply can become a significant point of negotiation between corporations and utility providers.