SK Hynix Defends Its Stock Price! Announces $40 Trillion Buyback and Full Cancellation of Treasury Shares

SK Hynix announced today (19th) that its board of directors has approved a large-scale treasury stock repurchase and cancellation plan, intending to invest approximately 40 trillion KRW to buy back its own shares and fully cancel them upon completion—the largest such initiative in the history of South Korean listed companies. At the same time, the company has further enhanced its shareholder return policy, raising the cumulative shareholder return amount for the period 2025 to 2027 from the previous guideline of "within 50% of free cash flow (FCF)" to "over 50%."

SK Hynix stated that this decision primarily reflects its belief that the current stock price does not adequately reflect the company's competitiveness in the AI memory market, its cash-generating capacity, and its medium- to long-term growth potential. As a result, the company has decided to advance the implementation of its shareholder return program originally scheduled for 2025 to 2027.

Industry analysts note that repurchasing treasury shares and then fully canceling them permanently reduces the number of outstanding shares, effectively signaling management’s strong confidence in the upcoming multi-year memory super-cycle using real capital.

With continued demand from AI servers driving growth in products such as high-bandwidth memory (HBM) and DRAM, SK Hynix has consistently achieved record-high operational performance in recent years. As of the end of the second quarter this year, the company holds approximately 69 trillion KRW in net cash, reflecting a clear improvement in its financial structure and cash flow capability.

Under the plan, SK Hynix will repurchase its own shares totaling 40 trillion KRW. Based on the closing price of 1.662 million KRW per share on the trading day prior to the board resolution, this equates to approximately 24.07 million shares, or about 3.3% of the company’s total issued shares of 730,492,365.

SK Hynix plans to begin the repurchase starting August 20 and complete the process within approximately three months. Once the buyback is finished, all acquired shares will be fully canceled.

SK Hynix emphasized that this 40-trillion-KRW share repurchase and cancellation constitutes an "advance fulfillment" of its existing shareholder return policy. As early as November 2024, the company announced its intention to execute shareholder returns within the range of 50% of cumulative free cash flow over the three-year period from 2025 to 2027, while also indicating that if future profits improve and free cash flow grows substantially, it would consider advancing and expanding its return program.

Now, with continued strengthening of operations and financial health, SK Hynix has formally adjusted its shareholder return policy from "within 50% of cumulative free cash flow" to "over 50%." Going forward, in addition to continuing share repurchases and cancellations, the company will simultaneously implement cash dividends and explore options such as increasing fixed dividends and paying special dividends.

SK Hynix stated that during the 2025–2027 policy period, it will comprehensively consider factors such as cash flow, market conditions, and distributable earnings to continue promoting additional shareholder returns through a combination of share repurchase/cancellation and cash dividends. Specific scale and execution methods will be reviewed by the board of directors and further detailed at the time of the third-quarter earnings announcement.