Report: SK Hynix Plans to Launch KRW 50-60 Trillion Shareholder Returns, Setting a Historic Record

SK Hynix is preparing to launch an unprecedented shareholder return initiative in response to market expectations for rapid growth in its AI memory business.

According to Korea’s Seoul Economic Daily on the 26th, SK Hynix plans to announce an additional shareholder return plan of 50 to 60 trillion KRW (approximately $38 billion to $45 billion) on October 28th, in conjunction with the release of its Q3 earnings. Coupled with the recently completed 40 trillion KRW share buyback and cancellation, the company’s total shareholder return this year will reach 90 to 100 trillion KRW, setting a historic high, nearly seven times last year’s scale.

This plan is mainly structured as a special dividend; it is also reported that the company is considering additional share buybacks and cancellations to meet the demands of institutional and foreign investors. Behind this massive return program is SK Hynix’s robust profitability and ample cash flow, fueled by the explosion in AI memory demand—securities firms estimate that its free cash flow will reach around 200 trillion KRW this year, and the company’s established policy is to use more than 50% of free cash flow for share buybacks, cancellations, and dividends.

As of press time, SK Hynix’s stock closed at 1.275 million KRW, still significantly below the record closing high of 2.919 million KRW set on June 22nd. The large-scale shareholder return plan is seen as an important step by management to boost share price recovery.

The financial foundation for SK Hynix’s shareholder return plan comes from the explosion in AI storage demand generating strong cash flows. Multiple securities firms estimate the company’s free cash flow (FCF) will reach about 200 trillion KRW this year.

According to its established policy, more than 50% of FCF will be allocated to shareholder returns such as share buybacks, cancellations, and dividends. As a result, this year’s shareholder return scale will fall in the 90 to 100 trillion KRW range—seven times last year’s comparable return.

Structurally, since the 40 trillion KRW share buyback and cancellation has recently been completed, the remaining additional 50 to 60 trillion KRW will mainly be distributed as a special dividend. Industry sources revealed, “With the large-scale buyback already executed, the special dividend will be the core of this plan.” At the same time, additional share buybacks and cancellations are also under consideration in response to institutional and foreign investor demands.

This plan puts SK Hynix into a competitive landscape with Samsung Electronics for the title of "South Korea’s largest corporate shareholder return."

In August this year, Samsung Electronics announced that its shareholder return for the year would reach 90 to 110 trillion KRW, claiming it would be the largest among Korean companies. If SK Hynix ultimately implements the 100 trillion KRW plan, the two companies’ payout scales will be very close, and the final title will depend on their respective actual figures.

Samsung Electronics holds the advantage in terms of earnings scale and cash reserves, while SK Hynix has quickly accumulated cash flow thanks to its leadership in AI storage chips such as high-bandwidth memory (HBM), making shareholder returns a core instrument for enhancing corporate value.

For investors, the key question is whether this record-scale return can effectively narrow the significant gap between SK Hynix’s current stock price and its historical highs.

SK Hynix’s stock price has declined over 56% from its June 22nd peak. With the semiconductor industry facing valuation pressures and diverging views on the memory chip cycle, the company’s management hopes bold capital allocation signals will convey confidence in its earnings sustainability to the market.

The board resolution and the third-quarter report on the 28th will provide the market with crucial data points to assess this logic. The final scale and details of the shareholder return plan will be released together with the earnings report at that time.