[Edaily Reporter SOYEON KIM ] SamsungElectronics and SK hynix have begun returning the massive amounts of cash they earned during the memory boom to their shareholders. The total shareholder returns announced by the two companies this year alone amount to as much as 150 trillion won, a figure estimated to exceed that of major U.S. memory companies. Attention in the industry is now focused on the “next three years” for SamsungElectronics and SK hynix, which typically announce their shareholder return policies on a three-year cycle.

According to industry sources on the 23rd, the large-scale dividends and share buyback and cancellation plans announced so far by SamsungElectronics and SK hynix total “150 trillion won plus alpha.”

SamsungElectronics approved a shareholder return plan totaling 90 trillion to 110 trillion won this year and plans to pay a 30 trillion won cash dividend at the end of October. This is the largest amount in the history of Korean corporate history. SK hynix recently announced a plan to repurchase and cancel its own shares worth 40 trillion won. The company also decided to expand the scope of shareholder returns from the previous “within 50% of cumulative free cash flow (FCF)” to “50% or more.” Additional shareholder return plans will be announced when the third-quarter earnings are released.

Industry observers predict that the shareholder returns of South Korea’s “Big Two” memory chipmakers will surpass those of U.S. semiconductor companies. Micron, which is frequently compared to SamsungElectronics and SK hynix, has stated that it will return 50–100% of its excess cash to shareholders. SanDisk has presented a plan to return 100% of its excess cash to shareholders.

At first glance, Micron’s return scale may appear larger, but in reality, this is not the case. Free cash flow (FCF) is a metric calculated by subtracting capital expenditures (CAPEX) and other items from cash generated through operating activities. SamsungElectronics and SK hynix are providing specific criteria and ratios for shareholder returns based on FCF. This means that the scale and timing of returns can be quantitatively predicted based on the announcements from both companies.

However, “excess cash” refers to the surplus cash remaining after deducting various amounts (required cash) from a company’s total cash holdings. In particular, since the amount of required cash varies significantly depending on the judgment of each company’s management, it is virtually impossible to estimate its scale. Furthermore, given the widespread expectation that SamsungElectronics and SK hynix’s future cash-generating capacity will increase, the actual scale of returns is likely to expand.

There is a clear trend within the industry to keep a close eye on the next three years for both companies. Although SamsungElectronics has not yet disclosed specific plans regarding its shareholder return policy starting next year, some in the securities industry speculate that the total shareholder returns over the next three years could exceed 600 trillion won. There are also forecasts that SamsungElectronics’ dividend payouts could increase to approximately 30 trillion won per quarter, or 120 trillion won annually.

The securities industry estimates that SK hynix’s free cash flow (FCF) over the next three years will reach approximately 491 trillion won. Applying the minimum return rate of 50 percent, the total shareholder return would amount to about 245 trillion won. However, since the company has raised its benchmark to return at least 50 percent of FCF, the actual return is expected to exceed this figure.

An industry official stated, “Memory companies, which had focused on capacity expansion and technology investments using cash secured during past booms, now face the new challenge of balancing growth with shareholder returns.”