South Korea's Memory Giants Spark Buyback Frenzy! Following SK Hynix's $29 Billion Share Buyback and Cancellation, Samsung Plans Over $71 Billion Return – The Largest in History

The AI-driven HBM supercycle is elevating the cash-generating power of South Korea’s two semiconductor titans to unprecedented heights, ushering shareholder returns into a trillion-won-scale arms race.

According to MoneyToday, Samsung Electronics plans to convene a board meeting by the end of August to finalize a shareholder return program exceeding 100 trillion won (approximately $71.7 billion), aiming to return 50% of its free cash flow to shareholders. The plan will primarily consist of special cash dividends, with additional payouts possible depending on future cash flow performance.

On Wednesday (19th), SK Hynix unveiled a 40-trillion-won (about $29 billion) share buyback—the largest in the history of Korean listed companies—representing approximately 3.3% of its issued shares. The buyback period runs from August 20 to November 19, and the company has simultaneously raised its shareholder return targets for 2025–2027.

The combined treasury stock programs of Samsung and SK Hynix reach 140 trillion won. The Seoul Economic Daily previously estimated that once both companies fully announce their plans by the end of August, the total could surpass 200 trillion won, setting a historic record for Korean corporations.

The foundation lies in their financial performance. Samsung achieved record-high revenues of 171.5 trillion won and an operating profit of 89.5 trillion won in Q2 this year. Its annual free cash flow is projected to exceed 200 trillion won, potentially nearing 250 trillion won. Returning 50% would thus provide a range of 100–125 trillion won for shareholder distributions.

SK Hynix also reported strong results in Q2, with revenues of 79.3 trillion won and an operating profit of 60.5 trillion won. It ended the quarter with net cash of 69.4 trillion won, leaving it well-capitalized even after the 40-trillion-won buyback.

In July, concerns over AI infrastructure triggered leveraged liquidations, causing sharp declines in both companies’ stock prices. By returning HBM cycle windfalls early through 'cancellation + special dividends,' they are not only stabilizing valuations but also directly countering skepticism about the sustainability of memory stock booms.

Global capital is positioning itself accordingly. Korean media previously reported that Singapore’s Temasek Holdings plans to invest directly in Korean equities using its own funds for the first time, targeting Samsung and SK Hynix. The sovereign wealth fund views them as the 'most undervalued segment in the AI value chain' and aims to increase its AI-related asset allocation from 6% to 15% over the next five years. Already holding stakes in NVIDIA, TSMC, and ASML, this move completes its memory puzzle.

With long-term capital, industrial cash, and cancellation-based buybacks converging, South Korea’s semiconductor shareholder returns are transitioning from an era of 'annual 9.8-trillion-won regular dividends' to a new scale where at least half of free cash flow is returned. However, should the cycle reverse, today’s generosity could become tomorrow’s leverage burden.