South Korea’s top memory chipmaker moves to cancel 3.3% of shares and lift returns amid AI cash flood.
SK Hynix just put its money where its mouth is. On August 19, the company announced it will repurchase and cancel 40 trillion won—about $28.6 billion—of its own shares, the largest such move by any listed firm in South Korea.
The board approved the plan after the stock fell nearly 10% the previous day. Shares have more than doubled this year on surging demand for high-bandwidth memory used in AI systems, yet the company still sees its price as undervalued.
The Scale and Timeline
SK Hynix will buy roughly 24.07 million common shares, or about 3.3% of the 730 million shares outstanding. Purchases run from August 20 through November 19 on the open market. Every share acquired will be canceled, not held in treasury.
The company based the value on the prior day’s close of 1,662,000 won per share. Net cash stood at about 69 trillion won at the end of the second quarter, giving it ample room to fund the program while keeping a strong balance sheet.
Raising the Bar on Shareholder Returns
The buyback accelerates a three-year plan first set in late 2024. SK Hynix has now raised its target from returning “within 50%” of cumulative free cash flow for 2025–2027 to “over 50%.” Returns will come through a mix of further buybacks, cancellations, and dividends. Higher fixed dividends and possible special dividends remain under review, with details expected alongside third-quarter results.
“We believe our shares are currently undervalued,” the company said in its regulatory filing. The move aims to reallocate capital efficiently and lift shareholder value while the AI memory boom continues to generate record cash.
Why It Matters Now
AI demand for advanced DRAM and high-bandwidth memory has transformed SK Hynix’s finances. Strong pricing and tight supply have produced outsized free cash flow, far beyond earlier forecasts. Analysts note the scale of this repurchase signals management confidence that memory pricing will not collapse soon.
U.S.-listed shares rose as much as 7% in pre-market trading after the announcement. The program also answers growing investor calls for Korean chipmakers to share more of their AI-driven windfalls.
Further returns could follow later this year. For now, the $28.6 billion cancellation stands as a clear statement: SK Hynix intends to convert its AI-driven cash into lasting shareholder value.
AI Disclosure: This article was created with the assistance of artificial intelligence tools and was reviewed and edited by the Glowls News editorial team before publication.