[Edaily Reporter KIM YOON-JEONG ] Attention is focused on whether SK Hynix’s additional share buyback worth 20 trillion won will help alleviate the downward pressure on the stock market caused by foreign selling. Previously, during periods when Samsung Electronics and SK Hynix simultaneously conducted large-scale share buybacks, the KOSPI remained largely flat despite concentrated selling by foreign investors. In contrast, after the scale of share buybacks decreased, foreign selling intensified, causing the index to plummet. Analysts in the securities industry note that while share buybacks can cushion stock price declines, a sustained rebound requires support from semiconductor earnings and a recovery in foreign investor demand.

◇55 Trillion Won in Share Buybacks Absorbed Foreign Selling… 17% Plunge After Buybacks Scaled Back
According to the Korea Exchange (KRX) on the 3rd, from August 24—when Samsung Electronics and SK Hynix simultaneously began buying back their own shares—through October 6, foreign investors net sold approximately 26.6 trillion won worth of shares in the two companies combined. During the same period, the two companies’ share buybacks totaled 46.5 trillion won, amounting to about 1.7 times the foreign net selling volume. The KOSPI rose 0.41% during this period, effectively remaining flat.
Both companies have been conducting large-scale share buybacks since August. SK Hynix acquired approximately 40 trillion won worth of its own shares from August 20 to October 21, while Samsung Electronics acquired approximately 15 trillion won worth from August 24 to October 6. The total value of the buybacks by the two companies reached 55 trillion won.
However, after Samsung Electronics concluded its share buyback, selling pressure from foreign investors intensified, and the KOSPI’s decline widened. From October 7 to 21, foreign investors net sold a combined 10.6676 trillion won worth of Samsung Electronics and SK Hynix shares. During the same period, SK Hynix’s average daily treasury stock purchase amount was 631.5 billion won, a 60.6% decrease from the combined purchase amount of both companies (1.6022 trillion won) during their joint buying period. As foreign investors’ average daily net selling reached 1.0668 trillion won, the KOSPI fell by 17.37%.
Kiwoom Securities analyzed that downward pressure on the index intensified as foreign investors’ selling of semiconductor stocks expanded—driven by rising U.S. interest rates, higher international oil prices, and concerns over the profitability of artificial intelligence (AI) investments—while the scale of share buybacks also decreased.
◇Start of Additional 20 Trillion Won Buyback… Stock Rebound Depends on Earnings and Foreign Investor Sentiment
SK Hynix will conduct additional share buybacks totaling approximately 20 trillion won from the 29th of last month through January 28 of next year. Of this amount, approximately 10 trillion won will be used to retire shares, while the remainder will be allocated for employee compensation and other purposes. According to the Financial Supervisory Service’s electronic disclosure system, SK Hynix acquired a total of 750,000 shares—250,000 shares per day—over three trading days from the 29th of last month, when the new buyback began, through the 2nd of this month.
However, foreign selling pressure continued even after the new buyback began. According to the Korea Exchange, from the 29th of last month through the 2nd of this month, foreign investors net sold SK Hynix shares worth 203.2 billion won and Samsung Electronics shares worth 223.7 billion won, respectively. During the same period, the KOSPI fell for two consecutive days on the 29th and 30th of last month before rebounding 2.24% on the 2nd of this month; however, it remains 2.55% lower than the closing price on the 28th of last month, just before the new buyback began.
On the other hand, there have been instances where the stock market rebounded sharply as expectations for semiconductor earnings recovered, even while share buybacks were suspended. Following SK Hynix’s third-quarter earnings announcement on the 28th of last month, foreign investors made net purchases totaling 734 billion won in Samsung Electronics and SK Hynix combined, and the KOSPI rose 6.63%. At that time, both companies’ existing share buyback programs had ended, and SK Hynix’s new buyback program had not yet begun.
The securities industry views share buybacks as providing downside support from a supply-and-demand perspective, but believes that an improvement in the semiconductor business cycle is necessary for a sustained recovery in stock prices. Han Ji-young, an analyst at Kiwoom Securities, acknowledged the cushioning effect of share buybacks against price declines but analyzed that the profit outlook for semiconductor companies and foreign investor sentiment are the key variables determining stock price direction.
Lee Young-gon, head of the Research Center at Toss Securities, stated, “For the AI semiconductor industry’s growth momentum to continue, it must be underpinned by the monetization of the AI industry.” He added, “Only when revenue and profits from AI services expand can hyperscalers sustain large-scale capital investments, and such investments, in turn, can lead to increased demand for AI semiconductors and earnings growth for related companies.”