SK Hynix will buy back 40 trillion won of its own stock, about $28.6bn at prevailing exchange rates, in what Korean media are calling the largest repurchase ever announced by a listed company in the country.

The board approved the programme on Wednesday and every share bought will be cancelled outright rather than held in treasury.

The move had been telegraphed. SK Hynix promised new shareholder-return measures earlier this month without attaching a number, and the market’s patience for the vagueness had already run out.

The buyback covers 24.07 million common shares, priced off Tuesday’s close of 1,662,000 won, and works out at roughly 3.4% of shares outstanding. Purchases run on the open market between 20 August and 19 November, with SK Securities acting as broker.

Alongside it, the company raised its shareholder-return commitment from 50% of cumulative free cash flow across 2025 to 2027 to more than 50%.

It is also reviewing a higher fixed dividend and a possible special dividend, with the detail promised at third-quarter earnings.

The proximate cause was a share price that refused to reward record results. SK Hynix reported second-quarter revenue of 79.32 trillion won, up 257% year on year, and operating profit of 60.54 trillion won, up 557%, at a 76% operating margin, and the stock fell about 9% on the day.

Investors were annoyed less by the numbers than by their absence from any payout announcement. In its filing, the company said the decision reflected that its competitive strength, cash generation, and mid-to-long-term growth potential were not sufficiently reflected in the current share price, which is about as close as a Korean chipmaker comes to conceding the point.

The scale of the round trip is worth stating plainly. SK Hynix crossed a trillion dollars in market value in May and peaked near $1.31tn in June; it is worth roughly $838bn now, a fall of about 40% in two months, even as the stock remains up more than 500% over a year.

It can afford the cheque. Net cash stood at around 69 trillion won at the end of the second quarter, and net debt to equity was negative 26%, though that quarter’s headline net income of 93.92 trillion won exceeds revenue and is largely an artefact of 62.17 trillion won in non-operating gains, chiefly the Kioxia stake sale.

What it is buying back with is money it is also spending very hard. Full-year capital expenditure is guided to the high 40 trillion won range, and the board separately approved 54 trillion won, roughly $38.3bn, for the Yongin Y2 and Cheongju M17 fabs on 7 August, part of a $720bn commitment stretching over the next decade.

The demand case rests on high-bandwidth memory, where SK Hynix holds roughly 58% of the market against 21% each for Samsung and Micron, on Counterpoint’s first-quarter reading.

HBM4 entered mass production in the second quarter with yields approaching HBM3E maturity, and around ten customers have signed long-term agreements typically running five years.

Pricing is doing much of the work too. DRAM average selling prices rose about 30% quarter on quarter and NAND prices climbed in the mid-50% range, with DRAM accounting for 73% of second-quarter revenue.

“Strong demand driven by the expansion of AI infrastructure investment and a tight supply environment continued,” Song Hyeon-jong, the company’s president, told analysts in July.

Samsung has been seeking third-quarter DRAM contract increases of up to 20%, so the tightness is not a one-supplier phenomenon.

Nvidia has certified SK Hynix, along with Samsung and Micron, for HBM4 supply into its Vera Rubin platform, and the company is reported to hold the majority of Nvidia’s HBM4 volume.

Samsung, whose second-quarter operating profit jumped 19-fold on the same demand, is under comparable pressure to return cash.

Korean media had been trailing a total shareholder-return package near 100 trillion won including dividends. What was approved on Wednesday is the buyback leg only, and the dividend decision waits for the third-quarter disclosure.

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