SK Hynix plans $28.6 billion buyback after share price declines

SK Hynix (SKHY) plans to buy back and cancel 3.3% of its shares, worth 40 trillion won ($29 billion), over three months. The company believes its stock is undervalued. Shares rose 12% in Seoul and 4% on Nasdaq. SK Hynix also announced a new shareholder return framework, aiming to return over 50% of cumulative free cash flow from 2025-2027. The company reported record revenue of 79.3 trillion won in Q2, with a 76% operating margin.

Samsung Electronics and SK Hynix announced large-scale shareholder returns, driving investor interest in semiconductor stocks. Samsung plans $90B-$110B in returns by 2026, while SK Hynix will buy back $40B in shares. ETFs tracking these companies saw high trading volumes and returns, with Samsung-related ETFs leading. The global semiconductor market remains strong due to AI demand, with NVIDIA reportedly raising prices due to memory chip shortages.

SK hynix (000660.KS) launched a 40 trillion won ($28.8 billion) share buyback, significantly impacting South Korea's KOSPI. The company bought 1.2243 trillion won worth of shares in two days, driving a surge in 'other corporations' net buying. Despite selling by retail investors, foreigners, and institutions, the KOSPI rose 0.88% on the 21st. Samsung Electronics (005930.KS) also announced a 15 trillion won buyback, potentially further supporting the index.

Nvidia has reportedly secured multi-year supply agreements for DRAM and HBM memory with SK Hynix and Micron until 2028, according to Edgewater Research. The move aims to address ongoing supply chain pressures and ensure long-term production stability for Nvidia's Rubin accelerators and data center GPUs.

Samsung Electronics and SK hynix announced record shareholder return programs. Samsung plans 90-110 trillion won in dividends and buybacks, while SK hynix unveiled a 40 trillion won buyback and cancellation plan. Both aim to capitalize on AI chip boom profits, with strategies shaped by ownership structures and financial constraints.

SK Hynix shares rose 2.31% on Friday, capping a 5.17% weekly rebound after the company announced a $28.9 billion share buyback and retirement plan. Analysts note the buyback could support near-term trading flows but warn of potential profit-taking. The buyback, the largest by a South Korean listed company, is expected to improve per-share value and earnings per share.