By Cynthia Kim and Hyunjoo Jin
SEOUL, Aug 21 (Reuters) – Samsung Electronics will hold a board meeting on Friday afternoon to discuss a new shareholder return package, a person familiar with the matter said, after media reports put the plan’s worth at more than $70 billion.
Samsung, which like rival SK Hynix, has seen earnings soar as the AI boom creates insatiable demand for chips, is expected to discuss special dividends as well as share buybacks and cancellations.
It is set to announce a new shareholder return package later this month worth more than 100 trillion won ($72 billion), South Korea’s MoneyToday reported.
The source, who declined to be identified as the plans were confidential, said the package could be worth a significant amount but did not give further details. A company spokesperson declined to comment.
Both Samsung, the world’s top memory chipmaker, and SK Hynix have been under much pressure to return gains to shareholders given their record-breaking profits.
SK Hynix said this week it will buy back and cancel 40 trillion won ($28.6 billion) of treasury shares and allocate more than 50% of its free cash flow generated between 2025 and 2027 to boost shareholder returns.
Under its 2024 to 2026 shareholder return policy, Samsung commits 50% of three-year free cash flow to shareholders.
Earnings gains have been stupendous.
In the second quarter, Samsung reported a more than 250-fold jump in chip profit to 89 trillion won. Its shares have surged 300% over the past 12 months but have come off a record high in June amid concerns that AI spending could slow.
Samsung and SK Hynix are set to hold a combined $263 billion in net cash by the year’s end. That is more than double the estimated $102 billion of AI bellwether Nvidia and exceeds the combined cash of the other six “Magnificent Seven” U.S. tech companies, LSEG data and Reuters calculations show.
On Friday, Samsung shares gained 3.5% while SK Hynix’s stock climbed 4.4%. The wider market was up 0.8%.
(Reporting by Cynthia Kim and Hyunjoo Jin; Editing by Ed Davies and Edwina Gibbs)
Comments