The South Korean chipmaker said it will buy back and ‘cancel’ these shares between Aug. 20 and Nov. 19.
- SK Hynix stock rose more than 5% in premarket trading on Wednesday.
- The South Korean chipmaker also said it will allocate more than 50% of free cash flow generated between 2025 and 2027 to boost shareholder returns.
- Earlier this month, SanDisk added a handsome $14 billion to its share buyback authorization.
SK Hynix on Wednesday announced plans to buy back and cancel 40 trillion won ($29 billion) of its treasury shares, according to a regulatory filing, in a move likely aimed at restoring investor confidence amid a volatile phase in the memory market.
SK Hynix’s U.S.-listed shares fell 9.2% on Tuesday amid a broader selloff in U.S. tech stocks, and remain 12.4% below the price at which the stock opened on its Nasdaq debut on July 10. SKHY stock rose more than 5% in premarket trading on Wednesday.
The South Korean chipmaker also said it will allocate more than 50% of free cash flow generated between 2025 and 2027 to boost shareholder returns.
The stock repurchase plan comes just a month after SK Hynix raised $26.5 billion through its U.S. listing, underscoring the vast sums of capital flowing into the AI boom.
However, the company, which is a key memory supplier to Nvidia, has since been caught in a broader selloff amid concerns that the surge in AI infrastructure spending may not last.
SK Hynix said its “intrinsic value — underpinned by its business competitiveness, robust cash generation capability, and mid-to-long-term growth potential — is not fully reflected in its current stock price.”
Memory Firms Turn Up Buybacks
The move comes as memory chipmakers are turning the lever on buybacks. Earlier this month, SanDisk added a handsome $14 billion to its share buyback authorization, taking the total exercisable limit to $15.5 billion.
Western Digital is fast exercising a $4 billion buyback plan it approved in February. Micron has been more restrained due to a limit on buybacks as part of its receiving grants from the U.S. government under the CHIPS Act, which lifts in December.
UBS recently said that Micron might announce a towering buyback then and could end up repurchasing more than 40% of its shares by 2026.
Cathie Wood Avoids Memory Stocks
Noted investor Cathie Wood said that she is steering clear of memory stocks, betting instead that technologies from Cerebras Systems and Groq can reduce the industry’s dependence on the costly chips.
The ARK Investment Management founder said in a podcast interview that the fund plans to avoid names such as Micron and SK Hynix, arguing that memory is becoming increasingly expensive and will incentivize engineers to build AI systems that need less of it.
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