Why did Samsung Electronics and SK hynix reject KEPCO’s five-year electricity bill prepayment proposal?

They concluded after internal reviews that it would be difficult to accept such a large upfront payment. The companies were also concerned about committing the money while it is unclear whether the current AI-driven semiconductor boom will continue.

How much did KEPCO ask Samsung Electronics and SK hynix to prepay for electricity bills?

KEPCO asked Samsung Electronics to pay 20 trillion won and SK hynix to pay 5 trillion won in advance. The company said those figures were roughly equal to five years of electricity bills based on what the chipmakers paid last year.

What was KEPCO trying to achieve with the prepayment plan for chipmakers?

The proposal was meant to help expand power infrastructure for semiconductor clusters under construction in Yongin and the southwestern Honam region. It came as KEPCO was carrying 210.7 trillion won in debt at the end of June, with daily interest expenses of 11.5 billion won.

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

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Summary

Korea's two major chipmakers, Samsung Electronics and SK hynix, have rejected KEPCO’s proposal to prepay five years of electricity bills. The utility had asked Samsung to pay 20 trillion won and SK hynix 5 trillion won in advance. The companies said accepting the offer would be difficult after internal reviews, as they were concerned about tying up such a large amount of money amid uncertainty over the AI boom. The proposal was linked to power infrastructure for semiconductor clusters in Yongin and the southwestern Honam region, while KEPCO’s debt stood at 210.7 trillion won at the end of June.

Key Facts

KEPCO proposed that Samsung Electronics pay 20 trillion won in advance and SK hynix pay 5 trillion won, amounts said to equal about five years of electricity bills based on last year’s payments.
Samsung Electronics and SK hynix reportedly notified KEPCO after internal reviews that accepting the prepayment plan would be difficult.
The proposal was intended to help expand power infrastructure for semiconductor clusters under construction in Yongin, south of Seoul, and in the southwestern Honam region.
As of the end of June, KEPCO’s total debt stood at 210.7 trillion won, and its daily interest expenses reached 11.5 billion won.

By Yonhap

Published Sep 14, 2026 9:53 am KST

Corporate logos of Samsung Electronics, left, and SK hynix / Yonhap

Korea's two major chipmakers, Samsung Electronics and SK hynix Inc., have rejected a proposal from state-run Korea Electric Power Corp. (KEPCO) to prepay five years' worth of electricity bills, industry sources said Monday.

Debt-ridden KEPCO recently proposed that Samsung Electronics pay 20 trillion won ($14.8 billion) and SK hynix pay 5 trillion won in advance, amounts equivalent to roughly five years of electricity bills based on the companies' payments last year, they said.

Samsung Electronics and SK hynix reportedly notified KEPCO of their decisions after conducting internal reviews and concluding that accepting the proposal would be difficult.

The decision is seen as reflecting concerns about committing such a large amount of money upfront when it is uncertain whether the semiconductor industry's current artificial intelligence (AI) boom will continue.

While the proposed prepayment scheme could have helped expand power infrastructure for semiconductor clusters under construction in Yongin, just south of Seoul, and the country's southwestern Honam region, the companies appear to have opted to minimize management uncertainties for now.

As of the end of June, KEPCO's total debt stood at 210.7 trillion won, with daily interest expenses reaching 11.5 billion won.

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