Announcement Overview

SK Hynix disclosed that its board approved a record share‑buyback and cancellation programme amounting to 40 trillion won (approximately US$28.6 billion). The programme will be executed between 20 August and 19 November and will involve the repurchase and cancellation of roughly 24.07 million shares, representing about 3.3 % of the company’s total share capital. The company described the move as the largest treasury‑share cancellation ever undertaken by a listed South Korean firm.

Market Reaction

Following the announcement, SK Hynix’s share price surged 8 % to KRW1.620 million, recovering from a 9.8 % decline the previous day. The rebound outpaced the broader KOSPI index, which rose 3.62 % to 6,705.23 after having fallen more than 5 % in the prior session.

Share Buyback Details

The buyback targets 24.07 million shares, equivalent to roughly 3.3 % of outstanding shares. By cancelling these shares, the company permanently reduces the share count, which, assuming unchanged earnings, should lift earnings per share over time. The initiative signals management’s view that the current market valuation does not fully reflect SK Hynix’s underlying business strength and cash‑generating capability.

Shareholder Return Policy

SK Hynix also announced an uplift in its shareholder‑return target, now aiming to return more than 50 % of cumulative free cash flow generated between 2025 and 2027, up from a previous ceiling of 50 %. The firm indicated that additional shareholder‑return measures, including further buybacks or dividend payments, could be announced in conjunction with its third‑quarter results.

Financial Position

At the end of the second quarter, SK Hynix reported net cash of approximately 69 trillion won, providing ample liquidity to fund both the substantial buyback programme and ongoing investments in AI‑memory production capacity.

Industry Context

The buyback comes amid heightened investor pressure on semiconductor manufacturers to return a larger share of cash generated by the AI boom. U.S. rival Micron has pledged to return 100 % of its excess cash to shareholders, while Samsung Electronics has also faced calls for increased shareholder payouts.