Samsung Electronics announced plans for 90 trillion won to 110 trillion won, roughly $65 billion to $80 billion, in shareholder returns this year, calling it the largest such package ever by a Korean company. The announcement came just days after rival SK Hynix disclosed its own massive share buyback, as both chipmakers ride an unprecedented artificial intelligence-driven demand surge for memory semiconductors.
The company chief financial officer Park Soon-cheol told analysts on a second-quarter earnings call that Samsung is actively discussing concrete implementation measures, including special dividends. Samsung uses 50 percent of its cumulative free cash flow generated from 2024 through 2026 as the base for total shareholder returns, with regular dividends of 9.8 trillion won paid annually and additional returns when surplus financial resources are generated.
AI Boom Drives Record Memory Demand
Both Samsung and SK Hynix are projected to deliver unprecedented profit levels this year and next, fueled by escalating demand for high-bandwidth memory, or HBM, chips used in AI training and inference. The AI chip boom has been the primary catalyst behind Samsung remarkable 450 percent stock appreciation over the past twelve months. The demand surge has also triggered a correction in how shareholders view the company obligation to return capital to investors.
Market watchers note that the combined shareholder return programs from Korea two largest chipmakers now exceed $130 billion, reflecting the enormous cash generation capacity of the memory industry in the AI era. SK Hynix earlier announced a plan for up to 100 trillion won, roughly $66.4 billion, in shareholder returns, centered on buybacks and cash dividends, timed to coincide with its upcoming U.S. American Depositary Receipt listing.
Competitive Dynamics and Market Impact
Samsung shares rallied more than 6 percent following initial reports of the buyback plan, reclaiming the top position in South Korea by common-share market capitalization and surpassing SK Hynix. However, the stock had previously suffered a sharp single-day decline driven by heavy profit-taking after its 12-month rally, along with selling pressure from leveraged single-stock ETFs focused on both chipmakers.
Analysts say the return packages reflect pressure from shareholders and employees who want the companies to distribute a portion of the AI-driven gains. The variable that could reduce the final payout is special management performance pay for semiconductor executives and employees. Samsung labor and management have established a special performance pay scheme in the device solution sector, with financial resources calculated at 10.5 percent of business performance.
The announcements come at a time when Samsung is also advancing its own HBM production capabilities to compete more directly with SK Hynix, which has dominated the high-end AI memory market. Both companies are investing heavily in next-generation chip manufacturing as global demand for AI infrastructure continues to accelerate, with major customers including Nvidia and cloud computing providers.
Sources: CNBC; MoneyCheck; MK (Maeil Business Newspaper); BigGo Finance; Yonhap News Agency
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