According to the Seoul Economic Daily, SK Hynix plans to announce an additional shareholder return program worth KRW 50–60 trillion when it releases its third-quarter earnings on October 28, primarily in the form of a special dividend. Combined with the share buybacks and cancellations already completed, the company's total shareholder returns this year are expected to reach a record-high KRW 90–100 trillion.
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 a report by South Korea's Seoul Economic Daily on the 26th, SK Hynix plans to announce, on October 28—the day it releases its third-quarter earnings—a supplementary shareholder‑return program totaling between 50 trillion and 60 trillion won (approximately $38 billion to $45 billion). Combined with the recently completed repurchase and cancellation of 40 trillion won in treasury shares, the company's total shareholder returns this year will reach 90 trillion to 100 trillion won, setting a record high—about seven times last year's level.
This plan will primarily take the form of a special dividend, while the company is also reportedly considering additional share buybacks and cancellations to address the demands of institutional and foreign investors. Behind this large-scale return‑of‑capital initiative lies SK Hynix's robust profitability and strong cash flow, driven by the surge in AI‑related memory demand. Securities firms estimate that the company's free cash flow this year will reach approximately KRW 200 trillion, and its stated policy is to allocate more than 50% of free cash flow to share repurchases, cancellations, and dividends.
As of press time,$SK Hynix (000660.KR)$The stock closed at 1.275 million won, still well below its all-time closing high of 2.919 million won set on June 22. A large-scale shareholder return program is seen as a key measure by management to help restore the share price.$SK hynix (SKHY.US)$It rose more than 3% in early trading.
Where does the trillion-won return come from?
SK Hynix's robust financial foundation for this shareholder return plan stems from the strong cash flow generated by the explosive growth in AI‑related storage demand. According to estimates from several brokerage firms, the company's free cash flow (FCF) this year is expected to be around KRW 200 trillion.
In line with the company's established policy, more than 50% of FCF will be allocated to shareholder returns, including share buybacks, cancellations, and dividends. Based on this approach, this year's total shareholder returns are projected to range between KRW 90 trillion and KRW 100 trillion—seven times last year's comparable level.
In terms of the specific structure, with the repurchase and cancellation of KRW 40 trillion in treasury shares having been completed ahead of schedule, the remaining KRW 50 to 60 trillion in additional measures will primarily take the form of special dividends. According to industry sources, "Given that the large-scale share cancellation has already been executed, special dividends will serve as the centerpiece of this plan." Meanwhile, in response to demands from institutional and foreign investors, supplementary share‑repurchase and cancellation schemes are also being evaluated concurrently.
Competing with Samsung Electronics for the title of "the largest in the country"
SK Hynix's plan also places it in the running to vie with industry giant Samsung Electronics for the title of "Korean company with the highest shareholder returns."
In August this year, Samsung Electronics was the first to announce that its shareholder returns for the year are expected to total between 90 trillion and 110 trillion Korean won, calling it the largest such payout among South Korean companies. If SK Hynix ultimately implements a plan to return 100 trillion won, the two companies' total payouts would be very close, with the final ranking depending on each firm's ultimate figures.
Samsung Electronics enjoys a scale advantage in both profitability and cash reserves, while SK Hynix has leveraged its leading position in AI‑related memory chips, such as high‑bandwidth memory (HBM), to rapidly build up cash flow and prioritize shareholder returns as a key driver of corporate value.
Can shareholder returns drive a valuation recovery?
For investors, the more fundamental question is whether the record‑high returns can effectively narrow the substantial gap between SK Hynix's current share price and its historical peak.
SK Hynix's share price has now fallen more than 56% from its June 22 peak. Against a backdrop of broad valuation pressures in the semiconductor sector and divergent market views on the outlook for the memory‑chip cycle, the company's management aims to convey confidence in the sustainability of its earnings by signaling a bold approach to capital allocation.
The Board of Directors' resolution on the 28th and the third-quarter financial results will provide the market with key data points for assessing this rationale. The final scale and structural details of the shareholder return plan will be disclosed concurrently with the earnings report.