Samsung, SK Hynix shareholders call for bigger payouts from AI cash mountain
Samsung and SK Hynix face investor pressure for increased shareholder payouts. These chipmakers are generating unprecedented cash from robust AI chip demand. Investors want more dividends and buybacks after record profits were reported. The companies currently target half of free cash flow for shareholder returns. This situation exacerbates concerns about the "Korea discount" valuation.
Investors in Samsung Electronics and SK Hynix are increasingly demanding larger payouts for their shares, following the two companies' unprecedented cash reserves driven by the AI boom. Both firms are projected to hold $263 billion in net cash by year-end, outpacing U.S. AI leaders like Nvidia and the combined cash of six other tech giants.
Despite record profits, the lack of detailed plans for dividend increases or share buybacks has raised concerns among shareholders about the sustainability of AI earnings. Samsung and SK Hynix currently return half of their free cash flow to shareholders, a figure some analysts argue is insufficient. Micron, a U.S. chipmaker, recently committed to returning 100% of its free cash flow.
Portfolio managers say that a more aggressive return policy could help close the "Korea discount" gap, where Korean companies trade at lower valuations than their global peers.
Written by urgent.news from Economic Times Tech's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
