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.
The chipmakers cited uncertainty around long-term semiconductor demand and questioned whether such a massive… pic.twitter.com/PqKW8NJAAJ
— Sam Badawi (@Sam_Badawi) September 14, 2026
The proposal came from KEPCO, South Korea’s state-run utility company. It wanted the advance payment to cover electricity costs tied to new chip fabrication plants, using the funds to build out the power infrastructure those plants would need.
What Was Proposed
Under the plan, Samsung would have contributed around 20 trillion won and SK Hynix about 5 trillion won. The idea was to help KEPCO move faster on infrastructure development as South Korea pushes to expand its semiconductor manufacturing capacity.
But after internal reviews, both companies told KEPCO the proposal would be difficult to accept. A company official in Seoul, speaking anonymously due to the sensitivity of the matter, said the firms were not sure such large upfront payments were necessary.
The main concern was uncertainty around how long semiconductor demand would hold up. The chip industry has seen cycles of boom and bust, and both companies appeared cautious about committing billions based on future projections.
Market Reaction
Investors responded quickly to the news. Samsung shares fell 3.7% in Seoul on Monday. SK Hynix dropped 5.3% on the same day.
The document revealing the rejection was shared with Reuters by the office of South Korean lawmaker Lee Chul-gyu. Samsung Electronics and SK Hynix both declined to officially comment on the matter.
South Korea has been facing growing power demand tied to semiconductor manufacturing and the expansion of AI infrastructure. The rejection of KEPCO’s proposal leaves the utility company without a clear path to funding the infrastructure upgrades it says are needed.
KEPCO must now look for other ways to raise money or find a different structure for the deal that the chipmakers might be willing to accept.
The South Korean newspaper Chosun Ilbo had reported earlier this month that KEPCO was pushing the advance payment idea, framing it as a way to get power infrastructure built ahead of the chipmakers’ expansion timelines.
No revised proposal has been announced as of September 14, 2026.
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