Samsung Electronics and SK Hynix have rejected a proposal by Korea Electric Power Corp (KEPCO) to make a 25 trillion won (S$23.6 billion) upfront payment to support power supplies for planned semiconductor mega clusters, according to a document submitted to a lawmaker.

The two chipmakers told the state-run utility company it would be difficult to accept the proposal following internal reviews, according to the document, which was shared with Reuters by the office of South Korean lawmaker Lee Chul-gyu.

The companies were unsure if such large upfront payments were necessary, citing uncertainty over the long-term durability of semiconductor demand, a company official in Seoul told Reuters.

The official spoke on condition of anonymity owing to the sensitivity of the matter.

Samsung Electronics and SK Hynix declined to comment.

South Korean newspaper Chosun Ilbo reported earlier in September that KEPCO had proposed that the chipmakers make the advance payment for electricity expected to be consumed by new chip fabrication plants, to allow the utility company to invest in infrastructure to power the plants.

Source: Straitstimes