{"id":3586,"date":"2026-05-05T15:57:19","date_gmt":"2026-05-05T15:57:19","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/3586\/"},"modified":"2026-05-05T15:57:19","modified_gmt":"2026-05-05T15:57:19","slug":"sk-hynix-faces-100-trillion-won-burden-for-shareholder-employee-rewards-2","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/3586\/","title":{"rendered":"SK hynix Faces 100 Trillion Won Burden for Shareholder, Employee Rewards"},"content":{"rendered":"

\"AA view of SK hynix’s Icheon campus. Photo courtesy of SK hynix<\/p>\n

SK hynix (000660.KS) is facing a sharp rise in cost burdens that matches its unprecedented external growth this year. Costs for shareholder and employee compensation are estimated to approach 100 trillion won ($73 billion), increasing more steeply than investments in facilities and new technologies needed to secure future competitiveness. Industry observers say SK hynix must move beyond earnings growth during the memory boom and focus on securing investment resources through strict cost management to prepare for intensifying global semiconductor competition.<\/p>\n

According to the financial investment industry on the 5th, SK hynix is expected to spend between 45 trillion and 90 trillion won on shareholder returns this year, including dividends and share buybacks and cancellations. That is up to seven times the 13 trillion won spent last year. While operating profit is forecast to surge from 47 trillion won last year to 230 trillion won this year, free cash flow (FCF), which is linked to this, is also expected to rise sharply. SK hynix has set a policy of using 50% of FCF for shareholder returns this year and next.<\/p>\n

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Employee bonuses are also set at 10% of operating profit, which is expected to reach 23 trillion won this year. The per-capita average of 600 million won is the highest in the industry, nearly five times the 4.7 trillion won paid last year. Shareholder return funds and bonus costs alone amount to around 100 trillion won.<\/p>\n

The pace of cost increases far exceeds the growth in capital expenditure (CAPEX) and research and development (R&D) investment directly tied to future competitiveness, such as fab expansion and new technology development. SK hynix spent 36.64 trillion won on CAPEX and R&D last year, and this year it is known to be increasing that by 20% to 30%, to approximately 50 trillion won. The company said during its recent first-quarter earnings conference call that “CAPEX this year is expected to increase significantly from last year,” but other cost burdens such as shareholder returns and bonuses are weighing on it, placing relative limits on aggressive investment.<\/p>\n

SK hynix is in a situation where it must intensively increase CAPEX starting this year, when major fab investments will be executed in earnest. In addition to the Yongin semiconductor cluster, which will be built at a scale of 600 trillion won over 25 years through 2050, the company is preparing to begin operations next year at a 19 trillion won Cheongju advanced semiconductor packaging (P&T7) fab and a 5.7 trillion won fab in Indiana, United States.<\/p>\n

The industry believes that to maintain high market competitiveness over the mid-to-long term, SK hynix must focus more on cost control beyond achieving high growth this year. In particular, criticism is mounting over the company holding a “bonus party” exceeding 15 trillion won while pursuing a listing of American Depositary Receipts (ADRs) on the U.S. stock market of that size for additional fundraising beyond its 200 trillion won-plus operating profit.<\/p>\n

“Announcing hundreds of millions of won in bonuses to employees while pursuing an additional overseas listing because of insufficient cash and infrastructure investment resources is the company shooting itself in the foot,” an industry official said.<\/p>\n

SK hynix has also requested government support for the introduction of a liquefied natural gas (LNG) cogeneration power plant at the Yongin semiconductor cluster as another fundraising measure. The government is reviewing a plan to support 3.4 trillion won in project costs through the National Growth Fund, a policy fund.<\/p>\n

Brokerages project that SK hynix’s four major costs this year \u2014 shareholder return funds, bonuses, CAPEX and R&D, plus corporate taxes \u2014 will combined approach around 200 trillion won. As operating profit grows, key costs directly and indirectly linked to it are also surging on a comparable scale. Previously, in 2020 and 2023, when the memory boom ended, the company failed to accumulate cash in advance, and amid overlapping earnings slumps, it sharply cut CAPEX to below 10 trillion won. During the same periods, Samsung Electronics steadily raised CAPEX investment thanks to over 100 trillion won in cash and cash equivalents.<\/p>\n

SK hynix responded that “reinvesting generated cash into the business is the best way to use capital,” adding that it “will pursue achieving financial soundness of more than 100 trillion won in net cash alongside expanding shareholder returns.”<\/p>\n","protected":false},"excerpt":{"rendered":"A view of SK hynix’s Icheon campus. Photo courtesy of SK hynix SK hynix (000660.KS) is facing a…\n","protected":false},"author":2,"featured_media":3043,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[2692,2691,2690,2645,697,732,241,275,2693],"class_list":{"0":"post-3586","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-sk-hynix","8":"tag-adr-listing","9":"tag-capex","10":"tag-employee-bonuses","11":"tag-free-cash-flow","12":"tag-memory-semiconductor","13":"tag-shareholder-returns","14":"tag-sk","15":"tag-sk-hynix","16":"tag-yongin-semiconductor-cluster"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/3586","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=3586"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/3586\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/3043"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=3586"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=3586"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=3586"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}