SK Hynix Sets Record Share Buyback as AI Cash Machine Booms

SK Hynix Inc., the world's leading AI memory supplier, has announced plans to repurchase and cancel 24.07 million shares over the next three months as part of a broader shift in its capital allocation strategy.

The company, which ended the second quarter with approximately 69 trillion won ($28.6 billion) in net cash, fueled by surging demand for high-bandwidth memory (HBM) chips used in AI accelerators, is following in the footsteps of Apple Inc., which showed that a technology company can invest heavily in growth while returning enormous amounts of cash to shareholders.

SK Hynix's record 40 trillion won share buyback isn't just a response to a falling stock price, it signals a shift in how the company intends to deploy its AI-driven cash windfalls. The move is part of SK Hynix's efforts to return more capital to shareholders, with the company raising its shareholder return commitment to over 50% of cumulative free cash flow generated between 2025 and 2027.

Investors had been urging both SK Hynix and Samsung Electronics Co., Ltd (OTC:SSNLF) to return more of their AI-driven profits through buybacks and dividends, with Apple's capital allocation strategy emerging as a benchmark for the industry. The shift in SK Hynix's strategy is expected to give investors a clearer framework for how future AI profits could be distributed.

The key question for investors is whether SK Hynix can continue generating AI-driven cash flows while maintaining heavy investment in next-generation memory, but the company believes it has room to return substantially more capital. The record repurchase may prove to be only the beginning of a new capital allocation era for SK Hynix.