SK Hynix's South Korean shares surge over 12% on stock buyback
SK Hynix shares rose over 12% following the announcement of a major stock buyback program and a commitment to increase shareholder returns. The move signals the company's confidence in its long-term growth, particularly in the AI-driven memory chip market.
Why it matters
The surge reflects broader market optimism in the semiconductor sector, which is currently benefiting from high demand for AI-related hardware.
Shares of SK Hynix surged over 12% in Seoul on Thursday after the company announced a massive stock buyback.
The company said it is accelerating its 40 trillion won ($28.7 billion) share repurchase and cancellation program, while pursuing a shareholder return expansion to over 50% of cumulative free cash flow generated between 2025 to 2027.
"We believe the initiative is expected to serve as a meaningful floor for the share price, providing tangible downside support in the near term," said Peter Lee, an analyst at Citi. The buyback also reflects SK Hynix's confidence in its mid- to long-term growth outlook despite current memory sector headwinds, Lee added.
The news come after the company said earlier this month it would invest 54 trillion Korean won to build new memory chip manufacturing plants, amid growing demand for components which are crucial for artificial intelligence.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in