SK Hynix Will Repurchase and Cancel $29 Billion Worth of Treasury Stock

In order to increase shareholder returns, SK Hynix (000660.KS) announced on Wednesday that it would buy back and cancel 40 trillion won ($28.61 billion) worth of Treasury shares and allocate more than 50% of free cash flow generated between 2025 and 2027.

Investors are putting increasing pressure on SK Hynix and Samsung Electronics to return a larger portion of their excess cash through dividends or share buybacks. The chipmakers reported record profits driven by the surge in demand for AI memory chips, but they provided little information on capital returns.

Concerns over the sustainability of AI spending have caused SK Hynix and Samsung shares to decline after reaching record highs in June, although their stock values are still much higher than they were earlier this year. These calls have become more intense.

SK Hynix stated that its “intrinsic value — underpinned by its business ‌competitiveness, ⁠robust cash generation capability, and mid-to-long-term growth potential — is not fully reflected in its current stock price.”

Additionally, the South Korean chipmaker announced that it would use dividends, share repurchases, and cancelations to increase its target total shareholder return from “within 50% ⁠of cumulative FCF” to “over 50% of cumulative FCF”.

It further stated that measures to increase payouts, such as special dividends, were also being considered. Details of increased shareholder returns are expected to be revealed in conjunction with the company’s third-quarter earnings report, which is anticipated to occur in late October.

As of the conclusion of this year’s second quarter, SK Hynix reported that its net cash was at 69 trillion won.