SK Hynix Rejects Prepayment for Grid Expansion Amid Rising Power Demand from AI Memory Boom
South Korea's leading memory manufacturers, SK Hynix and Samsung, have rejected a proposal by state utility KEPCO to prepay for grid infrastructure needed to power new semiconductor facilities. The request involved covering five years of electricity costs upfront—a move the companies refused despite surging demand for high-bandwidth memory (HBM) driven by AI growth. SK Hynix reported strong Q2 financial results, with revenue up 257% and net profit rising over twelvefold year-over-year. However, its ability to expand is constrained not just by chip supply but also by Korea's insufficient power infrastructure. The country anticipates new semiconductor plants will add electricity demand equivalent to twenty nuclear reactors. The issue highlights a growing global challenge: AI-driven data centers and memory manufacturing require massive amounts of continuous energy. This pressure could delay expansion timelines for SK Hynix, despite its dominant position in supplying NVIDIA with HBM.
Topics: AI memory demand KEPCO prepayment refusal NVIDIA SK Hynix South Korea energy crisis