Samsung, SK hynix could deliver record $212 bil. in shareholder returns: reports

A stock ticker in the dealing room at Hana Bank's headquarters in Seoul shows Samsung Electronics trading at 255,500 won per share and SK hynix at 1,504,000 won, Wednesday. Yonhap

With Samsung Electronics and SK hynix expected to unveil new shareholder return plans as early as this month, analysts estimate that the two chipmakers could together return as much as 300 trillion won ($212 billion) to investors.

Record second-quarter earnings — 89.5 trillion won in operating profit at Samsung and 60.5 trillion won at SK hynix — have strengthened their ability to reward shareholders.

The prospect of outsized payouts is also raising hopes that the two stocks, which together account for more than half of the benchmark KOSPI’s total market capitalization, could help rekindle the broader Korean market rally.

Samsung has pledged to return half of its free cash flow under its 2024-26 shareholder return policy, while SK hynix similarly plans to allocate 50 percent of its free cash flow generated from 2025 through 2027 to shareholders.

That could leave Samsung with as much as 200 trillion won and SK hynix with up to 100 trillion won to distribute, according to market estimates.

Kim Dong-won, head of research at KB Securities, expects Samsung’s new program to be large enough to push its dividend yield above 7 percent at the current share price.

SK hynix, meanwhile, has already exceeded the 100 trillion won net cash target it set at its annual general meeting earlier this year, according to Ryu Hyung-keun, an analyst at Daishin Securities.

The company’s cash position has been further bolstered by strategic transactions, including proceeds from the sale of its stake in Tokyo-based memory manufacturer Kioxia Holdings and a capital increase through the issuance of American depositary receipts on Nasdaq.

Together, those factors “create an environment in which up to 100 trillion won could potentially be allocated to share buybacks and cancellations, special dividends and other shareholder returns,” Ryu said.

The semiconductor boom is also giving other global chipmakers more room to return cash to investors. Sandisk has pledged to return all of its excess cash to shareholders, while Micron Technology announced plans to transition toward returning 100 percent of excess free cash flow.

Whether Samsung and SK hynix follow suit with outsized payouts could be an important test for the broader Korean stock market.

Na Jeong-hwan, a strategist at NH Investment & Securities, said the recent rebound in semiconductor stocks had been supported by expectations of higher shareholder returns, as well as strong earnings from companies benefiting from the AI infrastructure boom.

“News that Singapore’s sovereign wealth fund Temasek is investing in Korean semiconductor stocks has also helped improve investor sentiment,” he said.