SK Group Chairman Chey Tae-won has directly purchased approximately 4.8 billion won (approximately $3.4 million) worth of SK Hynix (000660) shares on the open market. With the stock price having been cut in half over the past month, the group’s leader is signaling his commitment to responsible management and demonstrating confidence in the company’s long-term growth prospects through action.
SK Hynix disclosed on July 30 through South Korea’s Financial Supervisory Service’s electronic disclosure system that Chairman Chey had purchased 3,620 common shares on the market. Based on the day’s closing price of 1,322,000 won, the purchase amounted to approximately 4.79 billion won. This is the first time Chairman Chey has purchased SK Hynix shares under his personal name.
An SK Hynix official described the purchase as “part of responsible management.” Chairman Chey had previously held no direct stake in SK Hynix, managing the company through an indirect control structure via its largest shareholder, SK Square (20.00%). With this purchase, Chey’s personal holdings now stand at 3,620 shares (0.00%), while total shares held by him and related parties amount to 146,128,151 shares.
The stock purchase is interpreted as a response to both the perceived undervaluation following SK Hynix’s recent sharp share price decline and a demonstration of responsible management. SK Hynix’s stock price soared to an intraday all-time high of 2,987,000 won on June 25, but has since plummeted roughly 56% from that peak, closing at 1,322,000 won on July 30 — just over a month later.
Market observers believe Chairman Chey sized the purchase with South Korea’s “5 billion won rule” in mind. Under current capital market laws, executives or major shareholders of listed companies must provide 30 days’ advance notice for stock transactions worth 5 billion won or more, or exceeding 1% of total outstanding shares. Given that this purchase was made at the maximum threshold exempt from disclosure obligations, there is speculation that Chey could make additional purchases within days, given the urgency of supporting the share price.
The purchase is particularly noteworthy as it came just one day after SK Hynix reported its largest-ever quarterly earnings. On July 29, the company announced second-quarter consolidated revenue of 79.32 trillion won (approximately $55.4 billion) and operating profit of 60.54 trillion won (approximately $42.3 billion). This represented a 557.2% year-on-year surge in operating profit — a record high. Its operating margin of 76.3% ranked second among global tech companies, trailing only U.S.-based Micron’s 80.4%.
However, the market’s reaction was chilly. Results fell roughly 6% short of the securities industry consensus of around 63.5 trillion won, and the subsequent conference call failed to present concrete plans for expanded shareholder returns, sharply cooling investor sentiment. SK Hynix shares fell more than 9% from the previous day, at one point plunging over 19% intraday.
Behind the absence of shareholder return measures lies U.S. securities regulation. SK Hynix entered a 25-day “Quiet Period” following the listing of its American Depositary Receipts (ADRs) on the Nasdaq on July 10. Under U.S. Securities and Exchange Commission (SEC) rules, the company could face sanctions if it announces favorable information or unconfirmed shareholder return plans during this period. The restriction is set to be lifted on August 4.
During the conference call, SK Hynix stated, “Due to regulatory and procedural constraints related to the ADR offering, we are limited in our ability to provide additional new material information at this time,” adding that “specific shareholder return measures will be shared with the market within the year once finalized.” The company holds 69.4 trillion won in net cash as of the end of the second quarter, indicating ample capacity for shareholder returns.
Experts suggest that once shareholder return measures become visible, they could serve as a catalyst for a share price rebound. Sohn In-joon, an analyst at Eugene Investment & Securities, forecast that “if additional returns such as dividend increases and share buybacks and cancellations proceed, and details of long-term supply agreements are presented, it could enhance confidence in long-term earnings and lead to a revaluation of corporate value.”
Chairman Chey’s purchase is also seen as putting into practice remarks he made at the Korea Chamber of Commerce and Industry’s Jeju Summer Forum on July 17. When asked about SK Hynix’s share price outlook at the time, Chey emphasized, “Memory will continue to be needed, so over time it will trend upward,” adding that “holding on rather than trading in and out is a good way to preserve wealth.”
He also expressed strong confidence in the growth potential of the AI memory market. “AI is still just a four-year-old child, but as it grows, it has no choice but to use memory,” Chey said, forecasting that “demand will increase exponentially.”
Meanwhile, SK Hynix also presented a concrete roadmap for second-half earnings improvement. The company plans to begin mass production and supply of its sixth-generation High Bandwidth Memory (HBM4) in the second half of this year and expand shipments of its 10-nanometer-class sixth-generation (1c) general DRAM. The next-generation HBM4E is under development with a target for mass production in 2027, and the company is also preparing “iHBM” technology that reduces heat generation by more than 30%. Additionally, SK Hynix is finalizing long-term supply agreement (LTA) negotiations at the five-year level with around ten Big Tech companies and is in discussions on next year’s HBM supply volume and pricing.