Samsung and SK hynix reportedly reject KEPCO’s $19 billion power payment proposal

South Korea’s two largest memory chipmakers have declined to accept a $19 billion upfront payment arrangement proposed by state utility KEPCO, according to a report from Seeking Alpha citing local media coverage.

The dispute centers on how Samsung Electronics and SK hynix would finance electricity infrastructure tied to their massive chip manufacturing operations. KEPCO, Korea Electric Power Corporation, has been seeking ways to recover costs associated with expanding power supply for the semiconductor industry, which consumes enormous quantities of electricity in the production of DRAM and NAND flash memory.

Memory fabrication plants are among the most energy-intensive industrial facilities in the world, and Korean chipmakers have been expanding capacity to meet surging demand driven by artificial intelligence workloads, data center buildouts, and advanced HBM (high bandwidth memory) products. SK hynix in particular has positioned itself as a leading supplier of HBM to AI accelerator makers, a business that has lifted its financial results over recent quarters.

The company’s stock reflected broader investor enthusiasm in the AI-driven memory cycle, with shares trading at $177.00, up 8.84% from a previous close of $162.62, giving SK hynix a market capitalization of approximately $903.9 billion.

While the report did not detail the full terms of KEPCO’s proposal, power pricing and payment structures have become increasingly consequential for Korean industry. KEPCO has faced financial strain in recent years from high fuel import costs, and industrial customers have pushed back against proposals that shift infrastructure financing burdens onto large users upfront.

Any prolonged disagreement between the utility and the chip industry could complicate planning for new fab construction, though both Samsung and SK hynix have continued to announce capacity investments domestically and abroad. Samsung operates fabs in Korea and the United States, while SK hynix runs production facilities in Korea and China and is building an advanced packaging operation in the US.

Neither company has publicly commented in detail on the reported rejection, and the scope of any revised proposal from KEPCO remains unclear.

What to watch

• Whether KEPCO puts forward a revised payment structure for industrial power customers
• Any official statements from Samsung or SK hynix regarding their power procurement plans
• SK hynix’s upcoming quarterly earnings report and commentary on HBM demand and capacity expansion
• Korean government policy signals on electricity supply for the semiconductor sector

Source: original release