SK Hynix Shares Surge on Record $28.6 Billion Buyback

SK Hynix shares staged a strong rebound on Thursday after the South Korean memory-chip giant announced a record 40 trillion won ($28.6 billion) share buyback and cancellation plan, providing fresh confidence to investors following a sharp semiconductor selloff.

SK Hynix shares jumped 8% to KRW1.620 million, recovering much of Wednesday’s 9.8% decline. The stock also outperformed South Korea’s broader KOSPI index, which climbed 3.62% to 6,705.23 after falling more than 5% in the previous session.

Under the newly approved program, SK Hynix will repurchase and cancel approximately 24.07 million shares between August 20 and November 19. The shares represent roughly 3.3% of the company’s outstanding stock. SK Hynix described the transaction as the largest treasury-share cancellation ever undertaken by a South Korean listed company.

The announcement comes as semiconductor stocks face increased volatility over concerns about elevated valuations and whether the artificial intelligence investment boom can sustain its rapid pace. SK Hynix indicated that the recent share price did not adequately reflect its intrinsic value, competitive position and long-term growth prospects.

Cancelling repurchased shares permanently reduces the company’s outstanding share count. Assuming profits remain stable, the move could increase earnings per share and improve returns for existing shareholders.

SK Hynix also strengthened its shareholder return policy. The chipmaker now plans to distribute more than 50% of cumulative free cash flow generated from 2025 through 2027, compared with its previous target of returning up to 50%. Additional buybacks or dividends could be announced alongside third-quarter earnings.

The company remains well positioned to balance shareholder returns with substantial AI memory investments. SK Hynix reported approximately 69 trillion won in net cash at the end of the second quarter.

The record buyback also reflects growing pressure on semiconductor companies to share AI-driven cash generation with investors. U.S. rival Micron has pledged to return excess cash to shareholders, while Samsung Electronics continues to face calls for increased shareholder payouts.