SK Hynix has announced it will repurchase and cancel KRW 40 trillion worth of its own shares, marking the largest buyback and cancellation ever by a South Korean listed company. The move aims to address the perceived undervaluation of its stock and demonstrates a firm commitment to returning value to shareholders following record performance in the AI memory sector.
According to a regulatory filing released on Wednesday, SK Hynix plans to acquire up to 24 million treasury shares between August 20 and November 19. This announcement helped the company’s shares recover some ground in after-hours trading, following a sharp decline of 9.8% during the regular session.
The initiative is an acceleration of SK Hynix’s previously stated shareholder return policy, which had outlined returns worth up to half of cumulative free cash flow generated between 2025 and 2027. Driven by improving financial results and strong cash generation tied to its position in the AI chip market, the company opted to deliver shareholder returns ahead of its original timeline.
SK Hynix’s aggressive buyback follows its recent $26.5 billion capital raise in its Nasdaq listing, highlighting robust demand amid the global AI market boom. However, shares of the memory chip vendor, a principal supplier to Nvidia, have recently come under pressure due to concerns about the durability of AI hardware investment.
Financially, SK Hynix posted a second-quarter net cash position of approximately KRW 69 trillion. The company attributed its ability to sustain early and sizable buybacks to continued improvements in liquidity and overall financial health.
The company has also intensified its returns policy, declaring a new minimum threshold of at least 50% of cumulative free cash flow to be allocated to shareholder rewards—surpassing previous guidelines. In addition to share buybacks and cancellations, cash dividend increases are under consideration, including the potential for both stable and special dividend distributions.
Last year, SK Hynix reported free cash flow of KRW 24.8 trillion. Market projections, as reported by FnGuide, anticipate a sharp rise to KRW 146 trillion in 2026 and KRW 240 trillion in 2027. Should SK Hynix return half of this cumulative free cash flow as committed, shareholder returns could exceed KRW 200 trillion for the period.
With its unprecedented treasury share cancellation, SK Hynix is seeking both to reinforce its leadership in AI semiconductors and to drive up shareholder value by reducing the share count and potentially lifting per-share metrics.
