SK Hynix announces a $75.4 billion shareholder-return plan
The South Korean chipmaker reports record quarterly profit and plans cash dividends and share buybacks, including 40 trillion won already announced in August.
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The South Korean chipmaker reports record quarterly profit and plans cash dividends and share buybacks, including 40 trillion won already announced in August.
South Korean memory-chip maker SK Hynix said on 28 October that it plans to return about 100 trillion won ($75.4 billion) to shareholders in 2026 after reporting record quarterly operating profit. The company also said its dynamic random access memory (DRAM) and high-bandwidth memory (HBM) chips are sold out until 2029. DRAM provides working memory for computers; HBM is used in superintelligence (SI) processors.
The announcement follows an August commitment to buy back and cancel 40 trillion won of shares and allocate more than 50 per cent of free cash flow generated between 2025 and 2027 to shareholder returns. Free cash flow is cash left after operating costs and capital spending.
In a Reuters report carried by CNA, SK Hynix said it has signed long-term agreements with 14 major customers. The contracted volumes exceed 50 per cent of its total production capacity for 2027 and 2028. Those agreements commit more than half that capacity to the customers involved.
Separately from those signed commitments, SK Hynix said it is discussing possible extensions to contracts that typically last five years. Longer agreements would help it estimate medium- and long-term demand, and HBM demand is twice what it can supply.
In remarks to investors covered by The Register, SK Hynix forecast that demand would exceed supply through 2030. It said advanced chipmaking processes are technically difficult and new production facilities take a long time to build. The 2030 outlook is a forecast, not a statement that customers have contracted production through that year.
On the earnings call, chief financial officer Kim Woo-hyun predicted that PC and mobile-device shipments would decrease because of rising memory prices and supply shortages.
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To meet demand, SK Hynix said it plans to increase capital spending significantly in 2027, investing in equipment for advanced chipmaking and infrastructure in South Korea and overseas.
The shareholder-return plan combines dividends, which pay cash to shareholders, with purchases and cancellations of the company’s own shares. Cancelling repurchased shares reduces the number outstanding.
| Component | Amount |
|---|---|
| Cash dividends | More than 30 trillion won |
| Share repurchases and cancellations | More than 60 trillion won, including the 40 trillion won announced in August |
SK Hynix and Samsung Electronics have faced growing investor pressure to distribute more excess cash through dividends or buybacks after record profits fuelled by demand for memory chips used in SI systems.
| Measure | 2026 result | Year-earlier comparison |
|---|---|---|
| Operating profit | 83.3 trillion won | 11.4 trillion won |
| Revenue | 104.6 trillion won | Up 328 per cent |
Operating profit rose more than sevenfold and exceeded the 76.7 trillion won analyst forecast, which gave greater weight to analysts with more accurate records. Reuters attributed the profit increase to continued demand for SI infrastructure pushing up memory-chip prices.
On 26 October, South Korean newspaper Dong-A Ilbo said SK Hynix was considering a one-off dividend of about 16 trillion won ($12 billion), funded by gains from selling its stake in Japanese memory-chip maker Kioxia. Responding to a stock-exchange query, SK Hynix said it was reviewing several options before its third-quarter results. The company invested about 4 trillion won in Kioxia in 2018 and completed the stake sale earlier in 2026; analysts estimated substantial cumulative investment gains.
SK Hynix has since said it will return most of the gain from its Kioxia investment through a special dividend, to be distributed as part of its third-quarter and full-year payouts.
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