Why Samsung and SK Hynix Turned Down KEPCO’s $18.7 Billion Prepayment Plan

TLDR

• Samsung Electronics and SK Hynix have turned down a $18.7 billion upfront power payment proposal from Korea Electric Power Corp (KEPCO)
• The proposal would have had Samsung pay around 20 trillion won and SK Hynix pay roughly 5 trillion won
• The chipmakers cited uncertainty over long-term semiconductor demand as their main reason for rejecting the deal
• The rejection leaves KEPCO searching for other ways to fund power infrastructure for South Korea’s semiconductor clusters
• Samsung shares fell 3.7% and SK Hynix dropped 5.3% in Seoul following the news

Samsung Electronics and SK Hynix have said no to a proposal from Korea Electric Power Corp that would have required the two chipmakers to pay a combined 25 trillion won, roughly $18.7 billion, upfront to help fund power infrastructure for their planned semiconductor manufacturing clusters in South Korea.

Samsung and SK Hynix $SKHY rejected KEPCO’s request for an $18.7B upfront payment to fund power infrastructure for South Korea’s planned semiconductor mega clusters.

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