How SK Hynix Could Top Samsung’s $80 Billion Shareholder Return

SK Hynix stock has risen nearly 600% in the past 12 months. (AFP via Getty Images)

Key Points

• Samsung Electronics approved a shareholder return plan for 2026 estimated at about $64.5 billion to $78.9 billion.
• SK Hynix announced its own stock buyback plan worth roughly $29 billion.
• A J.P. Morgan analyst expects SK Hynix could commit to a minimum of nearly $130 billion in additional shareholder returns through 2027.

Samsung Electronics has set the bar for returning cash to its investors with a mammoth shareholder return program of nearly $80 billion. But its domestic memory-chip rival SK Hynix might be able to beat that.

Samsung said Friday its board had approved a shareholder return plan for 2026 estimated at approximately 90 trillion won to 110 trillion won ($64.5 billion to $78.9 billion). It noted that it was five times the size of its previous record payout in 2020 and was the largest ever by a Korean company.

It’s not hard to think that might be a jab at its peer SK Hynix, which this week announced its own stock buyback plan worth roughly $29 billion, saying it was “the largest treasury share cancellation ever conducted by a South Korean listed company.” The move comes just weeks after SK Hynix’s U.S. listing, but the shares have struggled since then.

So what might be the next step in this race to return cash? J.P. Morgan analyst Jay Kwon thinks that at its third-quarter results, SK Hynix could commit to a minimum of 180 trillion won—or just short of $130 billion—in additional shareholder returns through 2027. That would be equivalent to 50% of the company’s accumulated free cash flow for the period from 2025-2027, once adjusted for existing return commitments.

“We cautiously expect SK Hynix to pursue additional shareholder returns through a combination of treasury stock acquisitions, cancellations, and dividends, with more focus on special dividends as SK Hynix’s policy runs from 2025 to 2027,” Kwon wrote in a research note.

Notably, SK Hynix said this week it would return more than 50% of free cash flow to shareholders, having previously targeted within the range of 50%. Samsung’s returns policy for the period of 2024-2026 is to allocate 50% of its free cash flow to shareholder returns.

U.S. investors might question what this means for them. For those holding SK Hynix’s American depositary receipts, they will receive any dividends, although those will be subject to potential fees by the custodian of the ADRs. However, stock buybacks won’t directly affect the ADRs.

SK Hynix ADRs were up 2% in early trading Friday.

Meanwhile, as Barron’s has written, shareholders of U.S. memory-chip maker Micron Technology will have to wait until at least Dec. 9 for any stock buyback announcement, due to temporary restrictions as a result of receiving government funding.

Write to Adam Clark at adam.clark@barrons.com

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