[Edaily SOYEON KIM Reporter Choi Oh-hyun] SK hynix is set to launch its largest-ever shareholder return program, backed by record-breaking earnings. Driven by the boom in artificial intelligence (AI) semiconductors—which has boosted its operating profit margin to 80% and significantly expanded its cash generation capacity—the company has decided to increase the scale of its shareholder returns to approximately 100 trillion won this year. The plan is to secure the funds needed for large-scale capital investments and the development of next-generation semiconductor technologies while sharing the fruits of its growth with shareholders.

◇ Operating Profit Margin Reaches 80%… “AI Demand to Continue Through 2030”

The operating profit margin recorded by SK hynix in the third quarter of this year means that for every 100 won in revenue, the company generated 80 won in profit from its core business. This is highly unusual given that the semiconductor manufacturing industry typically requires astronomical levels of capital expenditure and research and development (R&D) investment. It signifies that the current boom in the high-value-added memory market—including High Bandwidth Memory (HBM)—is at a level unprecedented in the history of the global semiconductor industry.

The pace of profitability improvement is also steep. SK hynix’s operating profit margin reached 58% in the fourth quarter of last year, surpassing that of TSMC (54%), the world’s largest foundry (semiconductor contract manufacturing) company. Following this, the margin rose to 72% in the first quarter of this year and 76% in the second quarter, before reaching the 80% mark in the third quarter. These massive profits have led to an improvement in the company’s financial structure. Net cash—calculated by subtracting debt from cash and cash equivalents—reached 98.7 trillion won at the end of the third quarter.

SK hynix believes this strong performance is not a temporary phenomenon. This is because the base of memory demand is broadening as the entities investing in AI expand from a handful of global Big Tech companies to general enterprises and state-led “sovereign AI” initiatives. The company forecasts that the growth in demand for AI semiconductors will continue through 2030.

In fact, the long-term supply agreements (LTAs) signed with major customers are a key factor enhancing the visibility of future earnings. SK hynix has signed LTAs with 14 companies, including cloud service providers (CSPs), and the secured contract volume amounts to more than 50% of its total production capacity for 2027–2028.

SK hynix spokesperson stated, “When we combine the LTA volumes we have already secured with the demand currently under specific discussion with our customers, virtually all DRAM and HBM volumes for the next three years through 2029 are effectively sold out.” The company explained that by securing buyers for a significant portion of its future production, it has reduced earnings uncertainty stemming from market fluctuations.

The company also dismissed concerns about oversupply resulting from large-scale capacity expansions. While construction of new factories—such as the Yongin Semiconductor Cluster and M17—will be accelerated, the actual expansion of production capacity will proceed in phases in line with market demand. The company plans to minimize the risk of oversupply by flexibly adjusting the timing of cleanroom operations, equipment installation, and the ramp-up of mass production.

The company is also accelerating efforts to ensure the competitiveness of next-generation products. SK hynix forecasts that in the fourth quarter of this year, both the shipment volume and revenue share of HBM4 will surpass those of its predecessor, HBM3E. The company explained that it is proceeding with HBM4 mass production while maintaining industry-leading yield rates.

◇ 20,000 won per share in cash to be distributed in Q3… “Special Dividend” from investment gains in Japan’s Kioxia

Leveraging its overwhelming cash generation capacity, SK hynix is embarking on a shareholder return program totaling approximately 100 trillion won this year. The company plans to allocate over 30 trillion won to cash dividends and over 60 trillion won to share buybacks and cancellations. The scale of share buybacks and cancellations includes the previously announced 40 trillion won share buyback. The company recently completed the purchase of these shares and plans to cancel them shortly. This move concretizes the company’s existing shareholder return policy, which commits to returning more than 50% of free cash flow (FCF) to shareholders.

In the third quarter of this year alone, the company will implement shareholder returns totaling 34 trillion won, including 14 trillion won in cash dividends and 20 trillion won in share buybacks. The dividend per share for the third quarter has been set at 20,000 won. This amount consists of a regular dividend of 10,000 won, reflecting strong earnings, plus a special dividend of 10,000 won to share the returns from the investment in Kioxia, a Japanese memory semiconductor company. This special dividend is significant in that it shares with shareholders the profits generated from past strategic investments.

The company will also proceed with share buybacks and cancellations. The previously announced 40 trillion won share buyback program was recently completed, and the shares acquired will be canceled shortly. The company plans to continue buying back shares every quarter to enhance the sustainability of its shareholder return policy.

SamsungElectronics, which is set to announce its final third-quarter earnings on the 29th, is expected to finalize a third-quarter cash dividend plan totaling approximately 30 trillion won. SamsungElectronics had previously announced a shareholder return plan for this year ranging from 90 trillion to 110 trillion won. The combined shareholder returns from the two companies are projected to exceed 200 trillion won. This represents an unprecedented level in the history of the South Korean stock market.