# KEPCO seeks $18 billion advance power bill payment from Samsung and SK hynix *The state utility wants five years of electricity fees paid upfront to fund transmission lines for the Yongin semiconductor cluster as its statutory bond ceiling nears.* **Published:** September 3, 2026 **By:** Ji-woo Han **Section:** Semiconductors & AI Hardware — South Korea **Format:** Breaking **Confidence:** medium **Source:** https://eastasiabrief.com/semiconductors/kepco-seeks-18-billion-advance-power-bill-payment-samsung-164 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - Korea Electric Power Corporation asked Samsung Electronics and SK hynix on Sept. - The state-run utility wants the upfront cash to build transmission lines for mega fabrication clusters in Yongin and the Honam region. - Samsung Electronics was asked to advance 20 trillion won ($14. ![Two workers in protective cleanroom suits inspect an equipment rack inside a semiconductor manufacturing facility. (AI-generated image)](https://eastasiabrief.com/media/2026-09-04-f1c3f5963775.webp) *Two workers in protective cleanroom suits inspect an equipment rack inside a semiconductor manufacturing facility. (AI-generated image)* Korea Electric Power Corporation asked Samsung Electronics and SK hynix on Sept. 3 to prepay 25 trillion won ($18.1 billion) in power bills to finance semiconductor grid construction. The state-run utility wants the upfront cash to build transmission lines for mega fabrication clusters in Yongin and the Honam region. The proposal shifts infrastructure financing directly to chipmakers. Samsung Electronics was asked to advance 20 trillion won ($14.5 billion), according to utility officials. SK hynix received a request to prepay 5 trillion won ($3.6 billion). The proposed prepayments equal five years of power costs for each manufacturer. Samsung Electronics paid 4.1 trillion won for electricity last year, while SK hynix paid 900 billion won. Park Chang-ryul, Head of Planning at KEPCO, confirmed the proposal on Sept. 2 at a National Assembly forum in Seoul. The utility and the manufacturers have not signed binding agreements. Talks began following a formal written proposal delivered on July 9, according to utility documents. KEPCO President Kim Dong-cheol met Samsung Electronics management strategy president Kim Yong-kwan on July 31. KEPCO based the funding structure on Article 78 of its general terms of electricity supply. The existing rule allows customers to pay bills early in exchange for interest credits. Public agencies and military installations used the prepayment mechanism for 390 billion won in deposits last year. KEPCO plans to expand that accounting clause into a multi-billion-dollar infrastructure funding mechanism. The proposal calls for the two chipmakers to deposit the funds in monthly installments over roughly 12 months. KEPCO would then deduct actual monthly electricity charges from the prepayment balance. KEPCO offered to credit interest on the remaining advance balance every six months, utility officials said. The utility proposed the yield on two-year South Korean treasury bonds plus 0.15 percentage points. The interest would be deducted from future electricity invoices rather than disbursed in cash, utility officials said. That yields an effective return slightly below KEPCO's own bond borrowing rates. KEPCO faces severe balance-sheet constraints that restrict its ability to issue debt in corporate bond markets. The utility carried 210.7 trillion won ($153 billion) in total debt at the end of June. Daily debt service costs KEPCO 11.5 billion won ($8.3 million) in interest expenses alone, the company said. Cumulative operating deficits reached 36 trillion won over the past five years. Special legislation permitting KEPCO to issue bonds up to five times its combined capital and reserves expires at the end of 2027. Borrowing limits revert to two times equity in 2028. The utility faces a statutory bond cliff unless lawmakers extend the waiver or power tariffs rise. Prepaying power bills creates alternative liquidity without adding recorded debt securities to domestic debt markets. The planned semiconductor cluster in Yongin requires massive transmission capacity additions before manufacturing can begin. Samsung Electronics plans six production lines in Yongin, while SK hynix plans four production lines. Both manufacturers also plan to construct two wafer lines each in the Honam region under national industrial development programs. Those four facilities expand regional power requirements further. Operating the planned fabrication facilities will require 20.6 gigawatts of power capacity by 2040, according to power ministry projections. That volume equals the electrical output of roughly 20 commercial nuclear reactors. South Korea's transmission grid plan budgets 72.8 trillion won through 2038 for high-voltage transmission lines. Growing power demand from semiconductor fabs and data centers could push total network outlays above 100 trillion won. Customer prepayments allow KEPCO to build dedicated transmission lines without construction delays, Park said during the legislative forum. Delayed grid connections would postpone cleanroom installations and commercial wafer output. For chipmakers, an upfront cash outlay of 25 trillion won competes with fab machinery procurement. Advanced extreme ultraviolet lithography scanners produced by ASML cost more than $200 million per unit. Prepaying 20 trillion won represents more than a third of annual capital expenditures for Samsung Electronics. The company deployed 53.6 trillion won in total facility investment across its semiconductor division last year. SK hynix allocated roughly 15 trillion won in annual capex during recent market upturns. A 5 trillion won power advance constitutes a major share of its annual facility budget. Neither company has accepted the prepayment proposal, representatives for Samsung Electronics and SK hynix said on Sept. 3. Executives are evaluating working-capital flexibility, yield spreads and construction guarantees for substations. KEPCO stated that participation levels, interest spreads and repayment schedules remain subject to negotiations. Commercial discussions will continue through working-level sessions in Sejong and Seoul. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | Semiconductor grid advance | chipmakers bear grid financing | monitors rival fab schedules | equipment delivery timing | memory capex reallocation | ## In this story - **Companies:** Samsung Electronics, SK hynix, Korea Electric Power Corporation - **Tickers:** 005930.KS, 000660.KS, 015760.KS - **Exposed:** ASML - **Policy:** Subsidies, Economic Security - **Impact:** Capex, Supply Chain, Cost Structure ## Primary sources 1. daum.net 2. wikitree.co.kr 3. sisajournal.com 4. kita.net 5. press9.kr --- Cite as: East Asia Brief, "KEPCO seeks $18 billion advance power bill payment from Samsung and SK hynix," September 3, 2026. https://eastasiabrief.com/semiconductors/kepco-seeks-18-billion-advance-power-bill-payment-samsung-164