KEPCO Proposes Prepaid Power Fees of 25 Trillion Won From Samsung, SK Hynix

Under the proposal, Samsung Electronics would prepay 20 trillion won (about $147 billion) and SK Hynix 5 trillion won (about $37 billion). The amounts are based on the two companies' annual electricity fees from 2027 to 2031 remaining at 2025 levels, when Samsung paid 4.1 trillion won and SK Hynix paid 900 billion won.

Prepayment of electricity fees is an existing mechanism at KEPCO, allowing customers to pay in advance and earn interest. In this proposal, KEPCO is considering adding special terms to turn the service into a large-scale financing channel. KEPCO has offered the two companies interest rates above the two-year government bond yield and discussed settling interest by offsetting electricity bills every six months rather than paying cash. On Thursday, the two-year Korean government bond yield closed at 3.722%.

One key reason for the plan is KEPCO's deteriorating financial position. As of the end of June 2026, KEPCO's liabilities reached 210.7 trillion won, with daily interest costs of about 11.5 billion won. KEPCO plans to use the prepaid funds for grid construction in Yongin, Gyeonggi Province, and the southwestern semiconductor cluster, both core sites for South Korea's semiconductor capacity expansion with significant funding gaps for supporting power infrastructure.

KEPCO's confirmed 11th Long-Term Transmission and Substation Equipment Plan covers 2024 to 2038 with total investment of about 73 trillion won, up 16.3 trillion won from the previous plan. According to the power supply plan announced by the Ministry of Trade, Industry and Energy, the first wafer fab in the Yongin general industrial complex is scheduled to begin production in 2027, requiring KEPCO to first build transmission lines from the Sinanseong substation to the Dongyongin substation, supplying about 3 gigawatts.