Samsung, SK Hynix May Return as Much as $216 Billion a Year to Shareholders

Samsung Electronics Pledges to Carry Out Three-Year Policy

SK Hynix Says It Will Meaningfully Expand Shareholder Returns

Samsung Electronics Co. and SK Hynix Inc. may unveil new shareholder return policies as early as August, with estimates in the market putting their combined annual payouts at as much as $216 billion.

The two companies have stepped up work on shareholder return plans after posting record second-quarter results this year, according to industry officials on Aug. 16.

Samsung said it will carry out its current three-year shareholder return policy for 2024 through 2026 as promised, allocating 50% of free cash flow to shareholder returns. The company also said it is reviewing its next policy in a way that maximizes shareholder value while maintaining an optimal balance between reinvestment for future growth and shareholder payouts.

SK Hynix has already said it will use 50% of free cash flow as the source of shareholder returns over 2025 through 2027. More recently, the company said it is actively reviewing additional measures to enhance shareholder value and plans to finalize and announce details in the third quarter.

Brokerages estimate the new shareholder return plans could total about $144 billion for Samsung and $72 billion for SK Hynix, bringing the combined annual amount to $216 billion.

Kim Dong-won, head of research at KB Securities, said Samsung's annual shareholder returns could range from at least $72 billion to as much as $144 billion. Even at the low end, the dividend yield would exceed 7% a year based on the current share price, he added.

That would be more than 10 to 20 times Samsung's current annual shareholder return plan of 9.8 trillion won, or about $7.1 billion.

Daishin Securities said conditions are in place for SK Hynix to spend as much as $72 billion on shareholder returns this year. Analyst Ryu Hyung-geun said the company presented a net cash target of $72 billion for this year at its annual shareholder meeting earlier this year and has already surpassed that goal.

He said SK Hynix could move ahead with share buybacks and cancellations, as well as special dividends, backed by proceeds from the sale of its Kioxia stake and the issuance of American depositary receipts.

Overseas rivals are also moving to expand shareholder returns. SanDisk recently projected annual revenue growth in the mid- to high-teens from 2028 to 2030 and said it would use 100% of excess cash for shareholder returns. Micron Technology has said it plans to return 50% to 100% of excess cash to shareholders.

Choi Su-jin, Hankyung.com reporter naive@hankyung.com