SK Hynix stock rebounded in premarket trading Wednesday after the South Korean memory-chip giant announced a massive 40 trillion won ($28.6 billion) share buyback and cancellation program aimed at boosting shareholder returns.
The recovery comes after a brutal session for SKHY stock on Tuesday. The company’s US-listed ADRs closed at $155.62, down 9.2%, after starting the day from a previous close of $171.38.
SK Hynix stock price (Source: Google Finance)
By Wednesday, the shares climbed back to around $161.53, up 3.8% in premarket trading. SKHY had risen as much as roughly 6% earlier in premarket trading.
SK Hynix Launches Record Share Buyback
SK Hynix said its board approved the repurchase and cancellation of approximately 24.07 million shares, which is around 3.3% of total issued shares. The roughly three-month repurchase program is scheduled to begin on Aug. 20, with all acquired shares set to be cancelled. SK Hynix described the move as the largest treasury-share cancellation ever undertaken by a South Korean listed company.
Press release from SK Hynix
The company is also raising its shareholder-return target. Rather than returning "within" 50% of cumulative free cash flow generated between 2025 and 2027, SK Hynix now plans to return more than 50%, using a combination of buybacks, share cancellations and dividends. Special dividends are also being considered, with further details expected around third-quarter earnings.
The announcement addresses a big concern among investors. SK Hynix and rival Samsung Electronics have generated a lot of cash from the AI-driven memory boom, but shareholders have pushed the companies to return more of that capital.
SK Hynix has the financial firepower to do so. The company ended the second quarter with 69.4 trillion won in net cash after posting record quarterly revenue of 79.3 trillion won and operating profit of 60.5 trillion won. Revenue jumped 257% year over year, while operating profit surged 557%.
Its longer-term AI story is also important. SK Hynix began mass shipments of HBM4 during the second quarter and plans to ramp production during the second half of 2026 as demand for high-bandwidth memory used in AI infrastructure continues to grow.
For SKHY stock, the buyback provides an immediate catalyst after Tuesday’s selloff. The next major test will be whether strong AI-memory demand and higher shareholder payouts can sustain the rebound.