SK Hynix moves to calm market with US$29 billion share buyback
Published Thu, Aug 20, 2026 · 04:15 PM
SK HYNIX unveiled plans to buy back 40 trillion won (US$29 billion) of stock and return more profits to investors, moving to stabilise its shares after they fell more than 50 per cent in two months.
The South Korean memory chipmaker said it will buy back as many as 24 million shares between Aug 20 and Nov 19 and cancel them, according to a regulatory filing on Wednesday (Aug 19).
It also raised its shareholder return pledge to more than 50 per cent of cumulative free cash flow from 2025 to 2027, equivalent to about US$170 billion, according to Bloomberg calculations. That is up from a previous target of up to 50 per cent. Its shares rose as much as 9 per cent in Seoul on Thursday, while rival Samsung Electronics advanced more than 5 per cent.
SK Hynix’s buyback plan follows the US$26.5 billion it raised in August in a US listing, which came around the height of market excitement around an AI rally. But since then, investors have grown concerned over the durability of AI hardware spending and begun demanding a handout.
“The size of this buyback is a strong signal from SK Hynix and delivers something investors have been calling for, putting its growing cash pile to work and increasing shareholder returns,” said Josh Gilbert, an analyst at eToro.
South Korea continues to be the focus of the Asian tech trade, after an investor frenzy that pushed market values of SK Hynix and Samsung to more than US$1 trillion each. The South Korean benchmark Kospi is still posting large daily swings, although the mountain of leveraged trades that drove record levels of volatility has started to unwind.
SK Hynix, a key supplier of high‑bandwidth memory chips to Nvidia, joined a recent sell-off over worries that spending on AI hardware could be short-lived. Its shares declined on Wednesday in South Korea before the buyback announcement, tracking losses in US semiconductor and other AI-related stocks as concerns over inflation and rising government debt kept bond yields elevated.
Analysts said Wednesday’s move is partly aimed at appeasing South Korean retail investors who were upset by the company’s decision to issue new shares for its US listing, rather than through existing treasury stock, which diluted their local holdings. The company said it was considering a plan to announce additional shareholder returns in 2026, which may include a special dividend.
One objective of SK Hynix’s listing in the US was to expand access to overseas investors and move beyond the limitations of the South Korea market, even if it did not immediately need more cash. It now has a pool of investors who are trading more highly valued American Depositary Receipts (ADRs), while the company is able to cancel some of its less valuable South Korean shares. The ADRs trade at a premium of about 40 per cent to the shares in South Korea as of the market close.
“SK Hynix probably wanted to end the chronic undervaluation of the shares at home, hoping the ADR issuance would pull up the overall valuation of the common stock as well,” said Sanjeev Rana, head of research at CLSA Securities Korea. “That hasn’t happened for various reasons, but this will help appease retail investor criticism in Korea.” BLOOMBERG
