According to Yonhapinfomax, South Korea's state power utility KEPCO proposed on September 3 that semiconductor manufacturers SK Hynix and Samsung Electronics prepay three years of electricity charges at interest rates positioned between 2-year government bond yields and 2-year KEPCO bond yields.
While both sides have reached basic agreement on the prepayment mechanism, semiconductor companies have objected to KEPCO's proposed rate terms. Industry sources indicate some chip makers argue the rates should at minimum match KEPCO bond levels, with an additional risk premium, citing concerns that future KEPCO bond rates could rise significantly, making direct bond purchases more attractive than locking in prepaid rates for three years.
