SK Hynix approves a $28.6B buyback, Korea’s largest share cancellation

SK Hynix’s board approved a 40 trillion won ($28.6 billion) share buyback on August 19, and every repurchased share is set to be cancelled. It’s the largest treasury share cancellation ever carried out by a South Korean listed company. Two days later, Samsung Electronics answered with a shareholder return plan worth up to 110 trillion won.

The repurchase covers about 24.07 million shares, roughly 3.3% of the total issued, based on the closing price of 1,662,000 won the day before the board met. Buying started on August 20 and is scheduled to run for about three months, with cancellation to follow. SK Hynix also lifted its shareholder return target from within 50% of cumulative free cash flow for 2025 to 2027 to over 50%, so buybacks now run alongside dividends as standing policy.

The move reads as a defense of the stock, because the backdrop isn’t calm. Semafor reported that the world’s second-biggest memory chipmaker acted to shore up investor confidence after its shares sank on Wednesday. The slide came a month after SK Hynix raised more than $26 billion in the largest share sale by a non-US company. The company argues its intrinsic value isn’t fully reflected in the price, pointing to net cash of about 69 trillion won at the end of the second quarter.

Samsung’s board followed on August 21 with 2026 shareholder returns estimated at 90 to 110 trillion won, or $65.1 billion to $79.52 billion. That’s about five times its previous record of 20.3 trillion won, set in 2020, and the largest ever announced by a Korean company. Roughly 30 trillion won of that is due as cash dividends in the third quarter, with details set for an October board meeting. The rest gets decided in January 2027, once full-year results are confirmed.

Samsung’s board also approved a share buyback worth about 15 trillion won for employee compensation, which sits outside the return plan but is still expected to support shareholder value. The result is that Samsung expects total returns for the 2024 to 2026 period, including this year’s package, to reach 120 to 140 trillion won.

The record-breaking shareholder return is intended to ensure that the Company’s growth translates into tangible benefits for shareholders, fostering a virtuous cycle in which corporate growth and shareholder value creation reinforce each other.

Samsung Electronics, via Samsung Global Newsroom

Both plans lean on the same AI boom. Samsung has been racing to catch SK Hynix in high-bandwidth memory, the chips used in AI systems. Its shares are up around 135% this year as of August 21, per CNBC. That demand runs through the whole supply chain, and it’s the same wave behind Nvidia’s latest revenue forecast.

Even so, the volatility that forced SK Hynix’s hand points at a harder question: whether the debt-fueled AI buildout can keep paying for itself. Semafor also reported that Google reached an AI chip deal on Wednesday, one that would allow it to buy $12 billion of shares in chipmaker Marvell. That deal raised further concerns among analysts about circularity in AI financing. The same worry hangs over the giant compute deals behind the buildout.

Company	Announced	Package	First step
SK Hynix	August 19	40 trillion won ($28.6 billion) buyback and full cancellation	Repurchases began August 20, running about three months
Samsung	August 21	90 to 110 trillion won ($65.1 billion to $79.52 billion) in 2026 returns	About 30 trillion won in third-quarter cash dividends

What to watch now is a run of board meetings. Samsung’s October meeting fixes the third-quarter dividend, and its January 2027 meeting sets the size and mix of the rest. SK Hynix, for its part, says fixed and special dividends are under consideration on top of the buyback. Whether the payouts calm the stocks turns on a question neither company can answer alone: how long AI memory demand holds up.