{"id":128413,"date":"2026-08-22T02:19:32","date_gmt":"2026-08-22T02:19:32","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/128413\/"},"modified":"2026-08-22T02:19:32","modified_gmt":"2026-08-22T02:19:32","slug":"samsungs-record-110-trillion-won-payout-falls-flat-as-sk-hynix-buyback-wins-market","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/128413\/","title":{"rendered":"Samsung’s Record 110 Trillion Won Payout Falls Flat as SK hynix Buyback Wins Market"},"content":{"rendered":"

\"SKSK Group Chairman Chey Tae-won and other key executives pose for a photo in front of the Nasdaq Tower in Times Square, New York, U.S., on July 10 (local time), when SK hynix began trading its Nasdaq ADRs. Reuters\/Yonhap News<\/p>\n

Samsung Electronics (005930.KS) and SK hynix (000660.KS), both flush with free cash flow from the boom in artificial-intelligence chips, have unveiled sweeping shareholder-return plans in quick succession, drawing intense attention across the capital market. By the headline numbers, Samsung leads with a payout of up to 110 trillion won ($77 billion) this year, but the market has responded more favorably to SK hynix, which decided to cancel 40 trillion won ($28 billion) worth of its own shares in full.<\/p>\n

SK hynix opened the round of expanded shareholder returns, according to financial investment industry sources on the 22nd. At a board meeting on the 19th, the company resolved to buy back and fully cancel 40 trillion won worth of its own shares, the largest share-cancellation case among listed companies in South Korea. It plans to complete the purchases within about three months, by November, to concentrate the buying and boost the effect on supply and demand.<\/p>\n

What the market watched most closely was the change in the payout benchmark. SK hynix raised its return standard to “at least 50%” of cumulative free cash flow, from the previous “within 50%,” effectively removing the ceiling on shareholder returns. The move was read as a commitment to lift shareholder value on the back of net cash that reached 69 trillion won at the end of the second quarter.<\/p>\n

Following the announcement, SK hynix shares climbed 15.3% in two days, closing at 1.73 million won on the 21st from 1.5 million won on the 19th. The company did not, however, specify a total annual return figure, and said it would provide details of further returns when it reports third-quarter earnings.<\/p>\n

Samsung Electronics also disclosed an additional shareholder-return policy after a board resolution on the 21st. Under a principle of returning 50% of cumulative free cash flow over the three years from 2024 to 2026, it said it would carry out a payout of up to 110 trillion won this year. That is more than five times the previous record of 20.3 trillion won set in 2020. Unlike SK hynix, Samsung disclosed an annual maximum, and by the numbers alone its payout is larger.<\/p>\n

In detail, Samsung will first pay about 30 trillion won ($21 billion) in cash in the third quarter, including its regular dividend. It plans to return the remaining 60 trillion to 80 trillion won through additional cash dividends and share buybacks and cancellations after its earnings are finalized in January. Separately, it approved a 15 trillion won ($10.5 billion) buyback to preempt concerns about an overhang, or the rise in shares outstanding, from large-scale employee compensation.<\/p>\n

Despite the 110 trillion won payout plan, the country’s largest, Samsung shares finished the 21st at 269,000 won, down 0.7% from the previous session. Analysts attribute the split market reaction to differences in the method and the benchmark of the returns. SK hynix chose share cancellation, which immediately lifts per-share value, while the 30 trillion won Samsung promised for the third quarter is concentrated entirely on cash dividends.<\/p>\n

The prevailing view among analysts is that Samsung fell short of market expectations by keeping its existing payout ratio of 50% of free cash flow. Some also expressed disappointment that, in calculating the three-year free cash flow, Samsung will deduct advance payments from long-term memory supply agreements (LTAs) and stock-compensation costs for employee bonuses. The concern reflected is that the larger employee bonuses grow, the smaller the pool that serves as the effective basis for shareholder returns could become.<\/p>\n

The industry expects the two companies’ shareholder-return rivalry to intensify in earnest from next year. Samsung must decide in January how to use the 60 trillion to 80 trillion won left after its third-quarter dividend. SK hynix, too, is likely to present further return measures, such as an expanded dividend, on its third-quarter conference call.<\/p>\n

An official in the financial investment industry noted that competition once centered on earnings and market share has now evolved into a contest to lift shareholder value. “As Samsung Electronics’ full-fledged mega-cycle of shareholder returns begins next year, the ratio of surplus funds used for share cancellation and its sustainability will be the key variables that determine the market’s assessment,” the official said.<\/p>\n

\"SamsungSamsung Electronics Chairman Lee Jae-yong attends an AI summit held at Midway in San Francisco, U.S., on July 24 (local time). News1<\/p>\n

Gap World probes the gaps in the flood of news during an era of contested technological supremacy, seen through the eyes of reporter Seo Jong-gap. Find the core and the outlook on cutting-edge technology and semiconductor issues here in Gap World. Please subscribe to the Gap World column and the reporter’s page.<\/p>\n

Questions of any kind are always welcome. Reach out by email, and follow-up reporting will be reflected in the next installment.<\/p>\n

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