SK Hynix to Buy Back and Retire $28.9 Billion of Shares, Saying Stock Fails to Reflect Its Competitiveness

SK Hynix Announces Share Buyback and Retirement

$28.9 billion plan; considering a further dividend increase

SK Hynix will buy back and retire 40 trillion won ($28.9 billion) of its own shares. The company also raised its shareholder return target for cumulative free cash flow from 2025 to 2027 to at least 50%, from the previous goal of up to 50%.

It plans to combine share repurchases and retirement with cash dividends, while also reviewing ways to expand payouts through fixed and special dividends.

SK Hynix said on August 19 that its board approved the 40 trillion won buyback-and-retirement plan and that it had disclosed the shareholder return policy. The company said it decided to retire the shares because it believes its intrinsic value, including business competitiveness, cash-generation capacity and medium- to long-term growth potential, is not fully reflected in the current stock price.

Based on the previous day's closing price of 1.662 million won a share, the company will buy back 24.07 million shares. That represents about 3.3% of its 730,492,365 shares outstanding.

The buyback will begin on August 20 and run for about three months. All repurchased shares will then be retired.

According to the company, the 40 trillion won share retirement is the largest ever by a South Korean listed company. SK Hynix also said stronger earnings driven by the artificial intelligence memory market lifted net cash to about 69 trillion won ($49.9 billion) at the end of the second quarter, improving its cash-generation capacity.

The move brings forward a shareholder return policy the company had originally planned.

In November 2024, SK Hynix said it would return capital to shareholders within 50% of cumulative free cash flow over the three years from 2025 through 2027. At the time, it also said it could consider earlier returns before the policy period ends if free cash flow rises meaningfully on improved earnings.

This time, the company raised the payout threshold itself, expanding the target from up to 50% of cumulative free cash flow to at least 50%. It will pair share repurchases and retirement with cash dividends and is also reviewing ways to increase dividends, including fixed and special payouts.

More details on the additional shareholder return plan will be disclosed with third-quarter earnings later this year.

SK Hynix said it plans to pursue additional shareholder returns during the policy period by combining share buybacks and retirement with dividends, taking into account cash flow, market conditions and distributable profit. The specific size and structure will be announced at the time of its third-quarter earnings release after a board resolution.

Kim Dae-young, Hankyung.com reporter kdy@hankyung.com