SK Hynix announced a share-buyback and cancellation of treasury shares worth 40 trillion won [1].
The move comes as the company seeks to calm market volatility and signal confidence in a long memory cycle driven by artificial intelligence. By reducing the number of available shares, the manufacturer intends to address a share price that it said does not reflect the company's intrinsic value [2], [3].
Based in Seoul, South Korea, the memory-chip manufacturer reported the plan on Aug. 19, 2024 [1]. The total value of the program varies slightly across reports due to currency conversions. Some sources report the buyback at US$28 billion [5], while others cite US$28.6 billion [4] or US$28.61 billion [1]. Higher-end estimates place the total at US$29 billion [2], [6].
The decision follows a period of share price declines. The company is leveraging its position in the AI boom to reassure investors that the current market valuation is too low [2].
This buyback represents a significant capital commitment to shareholder returns. It serves as a strategic tool to counteract short-term fluctuations in the semiconductor market, a sector often prone to extreme cycles of boom and bust.
By canceling the treasury shares, SK Hynix permanently reduces the share count, which typically increases the earnings per share for remaining investors. The company is betting that the demand for high-bandwidth memory required for AI processors will sustain growth over the long term [5].
“SK Hynix announced a share-buyback and cancellation of treasury shares worth 40 trillion won.”
This aggressive buyback suggests that SK Hynix believes the market is underestimating the longevity of the AI infrastructure build-out. By deploying billions of dollars to support its stock, the company is attempting to decouple its valuation from general semiconductor volatility and anchor it to the specific, high-growth trajectory of AI memory chips.
