Samsung, SK Hynix Reject KEPCO's 25 Trillion Won Prepaid Power Plan

Samsung Electronics and SK Hynix have formally rejected a prepaid electricity fee proposal from Korea Electric Power Corporation. In official written replies, the two chipmakers said they could not accept the proposal to prepay up to 25 trillion won, about 18.7 billion US dollars, in electricity bills to help finance transmission network construction. The plan was calculated on the basis of the two companies' actual power usage in 2025 and would have required Samsung Electronics and SK Hynix to prepay approximately 20 trillion won and 5 trillion won respectively, equivalent to covering five years of electricity bills in a single outlay. As interest compensation, KEPCO promised interest higher than the yield on two-year South Korean government bonds, to be returned through semi-annual deductions from actual electricity charges. KEPCO had planned to use the prepayment specifically to build a national backbone transmission grid, with priority given to securing power load for the large semiconductor cluster in Yongin, south of Seoul, and for ultra-large wafer fabs in the Honam region.

Samsung Electronics formally conveyed its rejection to KEPCO through a vice president-level executive on September 9, 2026, and SK Hynix made the same decision. KEPCO confirmed that it had not issued such prepayment requests to any companies other than the two semiconductor giants. As of the end of June 2026, KEPCO's total liabilities stood at 210.7 trillion won, and its daily financial interest expense was about 11.5 billion won. International fossil fuel prices have remained elevated for a prolonged period, while adjustments to end-user residential and industrial electricity rates have lagged. A special relief clause under which the South Korean government had temporarily raised KEPCO's corporate bond issuance ceiling to five times the sum of its capital and reserves is due to expire at the end of 2027, and the company needs to open new financing channels beyond conventional bond issuance to fill the infrastructure funding gap.