Via tomshardware.com
The Korean memory chip giant is betting nearly $29 billion that the market has it wrong
SK Hynix just announced a 40 trillion won (roughly $28.6 billion) share buyback, making it the largest treasury share cancellation ever undertaken by a Korean company. The buyback targets approximately 24.07 million shares, or about 3.3% of the company’s 730,492,365 total issued shares. Execution begins August 20 and runs through November 19, 2026.
SK Hynix’s stock has fallen nearly 50% from its June 2026 peak, a decline that the company views as disconnected from its actual financial health. The buyback announcement landed just weeks after the company completed a Nasdaq listing in July 2026 that raised approximately $26.5 billion.
SK Hynix pointed to its business competitiveness, cash generation capacity, and its position in the AI memory market as evidence that the stock price has drifted too far from intrinsic value. The company also committed to returning more than 50% of cumulative free cash flow generated between 2025 and 2027. That package includes buybacks, share cancellations, cash dividends, and potentially special dividends.
SK Hynix shares and its American Depositary Receipts climbed 6-9% on the news.
The semiconductor context #
SK Hynix is one of the world’s largest producers of memory chips, competing with Samsung Electronics and Micron Technology in a market that has been reshaped by the explosion in AI infrastructure spending. High-bandwidth memory, the specialized DRAM chips that power AI accelerators, has become the company’s crown jewel product line, with demand far outstripping supply across the industry.
Korean companies have historically been stingy with shareholder returns compared to their American and European peers, a pattern often referred to as the “Korea discount.” SK Hynix’s aggressive buyback and enhanced return policy represent a deliberate effort to close that gap, signaling to global investors that the old playbook is changing.
What this means for the broader market #
Samsung Electronics, which has faced its own Korea discount criticism for years, may face renewed pressure to follow suit with more aggressive capital return programs.
The company would not commit to returning over 50% of cumulative free cash flow through 2027 unless it believed that cash generation would remain robust, implying management sees sustained demand for high-bandwidth memory and other AI-related products well into the back half of the decade.
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