South Korea’s SK Hynix unveils record US$28.9bil share buyback

South Korean chipmaker SK Hynix announced plans for a record US$28.9 billion share buyback as it seeks to boost investor confidence amidst concerns over the AI investment boom. The world's leading producer of high-bandwidth memory chips for AI tools has seen its shares surge this year, but fell around 50% through July as investors fled the sector amid fears of delayed returns. Despite recent gains, SK Hynix's shares slipped 9.8% on Wednesday, reflecting ongoing tech market uncertainties and broader economic headwinds.

The company's board approved the plan to acquire and cancel ₩40 trillion worth of treasury shares, aiming to enhance shareholder value through efficient capital reallocation. SK Hynix's record profits and those of domestic rival Samsung Electronics have fueled optimism about South Korea's economic outlook, driving the Kospi index to a record high in mid-June.

However, the buyback follows a domestic move by SK Group chairman Chey Tae-won to purchase about ₩4.8 billion of his shares, signaling confidence in the company's prospects. SK Hynix will continue to evaluate potential further share buybacks and cancellations based on cash flow, market conditions, and distributable profits.