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SK Hynix’s board has approved a 40 trillion won (about $29 billion) buyback and cancellation of its own stock, representing the largest treasury cancellation ever initiated by a listed South Korean company. The chipmaker’s management claims the action is guided by its view that the market prices the company below its actual worth.
Largest stock cancellation in Korean market history
The company disclosed the decision through a regulatory filing after a board meeting today, according to SK Hynix’s newsroom. The company plans to retire all of the repurchased stock instead of repurposing it as treasury shares, which will permanently shrink the share count and lift each remaining holder’s slice of the company.
Using the 1,662,000 won closing price from the session before the board vote, the 40 trillion won buyback will acquire about 24.07 million shares, or approximately 3.3% of the 730,492,365 shares outstanding, the filing states.
Buying starts on August 20 and is scheduled to go on for about three months, with cancellation to follow once the purchases are complete. SK Hynix has said this will pull forward a shareholder-return program it first mentioned in November 2024, a program that promised payouts from 50% of the company’s cumulative free cash flow for 2025 till 2027.
SK Hynix stock dips in Seoul but green in New York
The two sides of SK Hynix’s listing moved in opposite directions after this buyback was announced. In Seoul, the KOSPI-listed shares closed 9.75% lower at 1,500,000 won, down from the previous 1,662,000 won close, based on MarketWatch figures.
The reaction was, however, totally different on Wall Street. SK Hynix’s American depositary shares traded at over 6% more before the bell at about $163.98, after which it hit an early high of $163.80, up 5.25%, after trading opened.
The SK Hynix ADRs started trading on July 10, 2026, and have lost more than 7% since, though Nasdaq data shows a gain of almost 3% over the past month and 3.4% across the last five sessions. The stock has swung between an ATH of $194.80 and a record low of $124.80.
Demand for the company’s chips has seen an increase, but investors have continued to question the valuation. The buyback is the company’s answer to that investor pressure.
Payout target percentage phrasing changes
Alongside the repurchase, SK Hynix also lifted its plans for returns granted to shareholders. The target has changed from the earlier “within 50%” of cumulative free cash flow to “over 50%,” according to the company’s filing. Payouts will come through a dual track that pairs buybacks and cancellations with cash dividends, and SK Hynix said it is weighing both fixed and special dividends to further expand distributions.
SK Hynix’s net cash flow was positioned at almost 69 trillion won at the end of Q2 2026, which the company pointed to as evidence of stronger cash generation due to its lead in AI memory chip manufacturing. The company also claimed that the exact scale and timing of any additional returns will be stated after board approval at its third quarter earnings release.
As one of the world’s biggest producers of DRAM and NAND flash memory, the company is taking advantage of heavy AI-driven demand regardless of the spending worries hanging over the sector.
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