Shares surged as SK Hynix unveiled one of the largest share repurchase programs in Korean corporate history, signaling management's conviction that the stock is undervalued even after a strong 2025 rally driven by insatiable demand for AI-related memory chips. SK Hynix Launches Korea's Biggest-Ever Share Buyback at $29 Billion — Is the AI Memory King Finally Rewarding Investors, or Racing Against the Cycle?
Shares jumped 6.7% to $166.01 after SK Hynix's board approved a 40 trillion won (~$29 billion) share repurchase and full cancellation program — the largest treasury share cancellation ever conducted by a South Korean listed company. The move puts real money behind management's claim that the stock is cheap, but the question is whether the AI-fueled cash gusher behind it can last.
• The Company Is Spending $29 Billion to Shrink Itself — and Promising Even More
Based on SK Hynix's closing price the day before the board vote, the program covers approximately 24.07 million shares, or about 3.3% of total shares outstanding. Cancelling those shares permanently — rather than holding them in treasury — means every remaining share gets a slightly larger slice of future profits. Critically, the company is also expanding its shareholder return target from "within 50% of cumulative free cash flow" to "over 50%."
Brokerages expect SK Hynix's free cash flow to surge to 146 trillion won this year and 240 trillion won next year; if the company returns at least 50%, payouts could exceed 200 trillion won over the period.
• A Mountain of Cash Makes This Possible — For Now
SK Hynix continues to post record-breaking financial results; as of the end of Q2 2026, net cash stood at approximately 69 trillion won.
Revenue and operating profit increased by 257% and 557% year-over-year, respectively.
The company now runs a 76% operating margin — extraordinary for a chipmaker historically treated as a commodity producer. That profitability is bankrolling the buyback without new debt.
• AI Memory Demand Is the Engine, but Cycles Haven't Been Repealed
SK Hynix said demand for high-bandwidth memory would outpace supply for at least the next three years.
The company leads the market with an estimated 50–55% share in high-bandwidth memory, and began mass shipment of its next-generation HBM4 chips in Q2, with expansion planned for the second half of 2026. Still, memory used to trade like a commodity; SK Hynix is now valued partly like an AI infrastructure name, and that thesis is "doing a lot of work in the current price."
• The Buyback Fills a Credibility Gap the Market Had Already Punished
On its July 29 earnings call, the company discussed shareholder returns but the lack of specifics disappointed investors, sending shares down nearly 10% that day. Today's concrete plan — with a defined dollar amount, share count, and three-month timeline — is the detail Wall Street was waiting for. The risk is execution: if memory prices roll over before November, the buyback becomes a very expensive way to catch a falling knife.