Investing.com — and shares surged on Thursday as investors welcomed a record buyback from SK Hynix and bet that South Korea’s two biggest memory-chip makers could deliver significantly larger shareholder returns.
SK Hynix shares jumped 13.9% to KRW1.708 million, while Samsung Electronics rose 9% to KRW269,750. Both stocks were rebounding sharply after leading Wednesday’s semiconductor selloff, which sent SK Hynix down 9.8% and Samsung down 5.4% as the KOSPI plunged more than 5%.
SK Hynix’s rally came after the company announced on Wednesday that it would buy back and cancel 40 trillion won ($28.6 billion) of its own shares, starting Thursday. The program covers about 24.07 million shares, or roughly 3.3% of shares outstanding, and runs through November 19.
The company called it the largest treasury-share cancellation by a South Korean listed company.
SK Hynix also increased its shareholder-return target, saying it plans to allocate more than 50% of cumulative free cash flow generated between 2025 and 2027 to shareholders, up from its previous “within 50%” target.
It said additional returns through buybacks, cancellations and dividends would be considered, with more details expected alongside third-quarter earnings.
The timing of the move is significant. SK Hynix shares had just suffered their sharpest daily decline in months as investors questioned the sustainability of the artificial-intelligence investment boom and the valuations of semiconductor stocks.
By committing KRW40 trillion to buybacks and cancelling the shares, SK Hynix is effectively arguing that the selloff has pushed its stock below what it considers its intrinsic value.
The company has also generated substantial cash from the AI memory boom, with net cash of around KRW69 trillion at the end of the second quarter.
Meanwhile, Samsung Electronics shares are rallying after MoneyToday reported that the company plans to finalize a shareholder-return package worth more than 100 trillion won later this month, potentially including a special cash dividend.
The report, published Thursday morning, said Samsung plans to convene its board in August to approve the new measures, which would make the package one of the largest shareholder-return programs by a South Korean company. Samsung has not yet formally confirmed the 100 trillion won figure.
The reported plans build on comments Samsung made during its second-quarter earnings call on July 30, when the company said its board and management were actively discussing this year’s shareholder-return policy, including a potential special dividend, and would provide an update soon.