[Edaily Reporter JAEMIN SONG ] SK hynix will repurchase 40 trillion won worth of its own shares and cancel them in their entirety. As its cash generation capacity has significantly improved—driven by the artificial intelligence (AI) memory boom, which has led to record-breaking earnings for five consecutive quarters—the company has decided to implement its existing shareholder return policy ahead of schedule and return more than 50% of its cumulative free cash flow (FCF) from 2025 to 2027 to shareholders.

SK hynix held a board of directors meeting on the 19th, approved a resolution to repurchase and cancel its own shares, and announced its shareholder return plan. The company made this decision after determining that its intrinsic value—including business competitiveness, cash generation capacity, and mid- to long-term growth potential—was not sufficiently reflected in the current stock price.

The total amount allocated for the repurchase is 40.00434 trillion won. The company will purchase 24.07 million common shares based on the closing price of 1,662,000 won on the 18th, the day before the board resolution. This represents approximately 3.3% of the total 730,492,365 issued shares. According to the company, this is the largest-ever share buyback and cancellation by a South Korean-listed company.

The acquisition period runs from the 20th through November 19. The shares will be purchased on the open market through SKSecurities, with a daily purchase limit of 2,407,000 shares. The actual number of shares acquired may vary depending on future stock price fluctuations. SK hynix plans to cancel all acquired treasury shares once the purchase is complete.

This decision represents an early implementation of the shareholder return policy announced in November 2024. At that time, SK hynix stated that it would implement shareholder returns within 50% of its cumulative free cash flow (FCF) for 2025–2027, but would consider early returns even before the policy’s expiration if FCF increased significantly due to improved performance.

As the AI memory boom continues, market expectations for large-scale shareholder returns have been rising. The securities industry estimates that SK hynix’s FCF this year will reach the mid-100 trillion won range. With net cash increasing to approximately 69 trillion won as of the end of the second quarter of this year, analysts assess that the company has greater capacity to expand shareholder returns while maintaining a stable financial structure.

SK hynix previously announced on the 7th that it would finalize and announce additional shareholder return measures during the third quarter. This brings forward the announcement timeline compared to its earlier statement during the second-quarter earnings conference call, where the company had said it would “share the details with the market within the year.” Following this 40 trillion won share buyback and cancellation, the company is expected to unveil additional return measures, including dividends.

Through this disclosure, the company expanded the scope of shareholder returns from the previous “within 50% of cumulative FCF” to “50% or more.” It plans to combine the acquisition and cancellation of treasury stock with cash dividends and is also reviewing measures to expand dividends, including existing fixed dividends and special dividends.

SK hynix stated, “We plan to pursue additional shareholder returns by combining share buybacks and cancellations with dividends, taking into account cash flow, market conditions, and distributable profits during the policy period,” adding, “We will announce the specific scale and method following a board resolution at the time of our third-quarter earnings release.”