SEOUL, Aug 19 (Reuters) - SK Hynix said on Wednesday 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 to boost shareholder returns.
The move comes amid growing pressure from investors for SK Hynix and Samsung Electronics to return a bigger share of excess cash through dividends or share buybacks, after the chipmakers offered scant detail on capital returns despite reporting record profits fuelled by booming demand for AI memory chips.
Those calls have intensified as SK Hynix and Samsung shares retreated after hitting record highs in June amid concerns about the durability of AI spending, though their stock prices remain far higher than earlier this year.
SK Hynix said 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."
The South Korean chipmaker also said it would pursue an expansion of its total shareholder return target from the previous "within 50% of cumulative FCF" to "over 50% of cumulative FCF" through share repurchases, cancellations and dividends.
It added that options to expand payouts, including special dividends, were also under consideration, with details of additional shareholder returns due to be announced alongside its third-quarter earnings release, likely in late October.
SK Hynix said its net cash stood at approximately 69 trillion won as of the end of the second quarter of this year.
($1 = 1,397.9200 won)
Reporting by Hyunjoo Jin, Heejin Kim, and Heekyong Yang Editing by Ed Davies
Source: Reuters