TLDR
- Korea’s leading chipmakers, Samsung Electronics and SK Hynix, have declined Korea Electric Power Corp’s (KEPCO) proposal for $18.7 billion in advance electricity payments
- Under the rejected plan, Samsung would have paid approximately 20 trillion won while SK Hynix’s share was set at 5 trillion won
- Both companies pointed to unpredictable long-term semiconductor market conditions as their primary justification for walking away
- KEPCO now faces the challenge of finding alternative funding mechanisms for critical power infrastructure supporting South Korea’s chip manufacturing hubs
- Stock prices for Samsung declined 3.7% while SK Hynix saw a sharper 5.3% drop in Seoul trading after the announcement
Two of South Korea’s semiconductor manufacturing powerhouses, Samsung Electronics and SK Hynix, have rejected an ambitious funding proposal from Korea Electric Power Corp that sought a massive upfront payment totaling 25 trillion wonāapproximately $18.7 billionāto finance electrical infrastructure for their future chip production facilities across the country.
Samsung and SK Hynix $SKHY rejected KEPCOās request for an $18.7B upfront payment to fund power infrastructure for South Koreaās planned semiconductor mega clusters.
The chipmakers cited uncertainty around long-term semiconductor demand and questioned whether such a massiveā¦ pic.twitter.com/PqKW8NJAAJ
ā Sam Badawi (@Sam_Badawi) September 14, 2026
Korea Electric Power Corp, the nation’s government-owned electricity provider, initiated the proposal seeking advance payments to offset electricity expenses associated with upcoming chip fabrication facilities, with plans to deploy these funds toward constructing the necessary power infrastructure for these operations.
Details of the Rejected Arrangement
According to the proposed structure, Samsung would have been responsible for approximately 20 trillion won, while SK Hynix’s contribution was pegged at roughly 5 trillion won. KEPCO designed this framework to accelerate infrastructure deployment as South Korea intensifies efforts to strengthen its position in global semiconductor production.
Following comprehensive internal assessments, both manufacturers informed KEPCO that accepting such terms would pose significant challenges. An industry source in Seoul, requesting anonymity given the delicate nature of ongoing discussions, indicated that neither company was convinced such substantial advance payments were warranted.
The central issue driving their hesitation was the volatile nature of semiconductor market demand. Given the chip sector’s historical pattern of alternating between explosive growth and significant downturns, both organizations demonstrated reluctance to lock in billions of dollars based solely on projected future requirements.
Stock Market Impact
Financial markets reacted swiftly to the disclosure. Samsung’s stock price tumbled 3.7% during Monday’s Seoul trading session. SK Hynix experienced an even steeper decline, losing 5.3% the same day.
Documentation confirming the rejection was provided to Reuters through the office of South Korean National Assembly member Lee Chul-gyu. When contacted for official statements, both Samsung Electronics and SK Hynix refused to comment publicly on the situation.
South Korea continues grappling with escalating electricity requirements driven by semiconductor production expansion and the rapid buildout of artificial intelligence infrastructure. With this proposal’s failure, KEPCO finds itself without an obvious funding mechanism for the infrastructure enhancements it maintains are essential.
The utility company must now pursue alternative financing strategies or restructure the arrangement in a format that might prove more palatable to the semiconductor manufacturers.
Earlier this month, South Korean publication Chosun Ilbo had reported that KEPCO was actively promoting the advance payment concept, positioning it as a solution to ensure power infrastructure would be operational before the chipmakers’ expansion schedules demanded it.
As of September 14, 2026, no modified proposal has been publicly disclosed.
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