Samsung Electronics (005930.KS) climbed 3.87% to ₩281,500 on Friday after the company outlined a record shareholder return plan that could reach 110 trillion won, or about $80 billion, during 2026. The announcement follows SK Hynix's major buyback program and raises the stakes across South Korea's chip sector, where strong demand for AI memory has sharply increased both companies' cash positions and chip profits.

Samsung Electronics Co., Ltd., South Korea's largest company and one of the world's leading memory chipmakers, expects total shareholder returns of between 90 trillion won and 110 trillion won this year. The plan also aligns with South Korea's government-backed Corporate Value-up Program, introduced in 2024 to encourage listed companies to improve shareholder returns and narrow the long-running "Korea discount" in the country's share valuations.

Record Shareholder Return Plan

The company described the program as the largest shareholder return package ever announced by a Korean company. Samsung also plans about 30 trillion won in third-quarter cash dividends.

The planned dividend will include Samsung's regular quarterly distribution under its existing shareholder policy. The board will finalize the details of that payment at a meeting scheduled for late October. Samsung will determine the remaining shareholder returns at a separate board meeting in January 2027.

For the remaining amount, Samsung can use additional cash dividends, share repurchases, and share cancellations. The company has also purchased 15 trillion won of shares for employee stock compensation. However, those shares form part of employee incentives rather than direct shareholder distributions.

SK Hynix Buyback Raises Pressure Across Chip Sector

Samsung's announcement follows SK Hynix's decision to launch a 40 trillion won share buyback. SK Hynix, the world's second-largest memory chipmaker, also plans to cancel those treasury shares after completing the repurchase program. The move strengthened calls for Samsung to return more of its growing cash reserves.

SK Hynix plans to allocate more than half its free cash flow from 2025 through 2027. Samsung's current policy, by comparison, allocates 50% of accumulated free cash flow from 2024 through 2026. Samsung also maintains annual regular dividends of 9.8 trillion won under that framework. Tying the overall payout to free cash flow rather than a fixed total reflects the memory industry's history of pronounced demand and price cycles.

Both companies have benefited from stronger memory-chip demand linked to artificial intelligence infrastructure spending. Samsung shares have gained about 135% this year, while longer-term gains have also remained strong. Friday's rise extended that momentum after the stock briefly approached ₩285,000 during the session.

AI Chip Profits Strengthen Samsung's Cash Position

Samsung's chip business has generated sharp profit growth as demand for advanced memory products expands. Second-quarter chip profit increased more than 250-fold from the comparable period. That improvement strengthened Samsung's capacity to fund dividends, buybacks, research, and production investments.

Samsung and SK Hynix could hold about $263 billion in combined net cash by year-end. That amount would exceed Nvidia's estimated cash position as well as the combined cash of several major American technology companies. The figures underline the financial strength created by the current memory-chip cycle.

Samsung still faces competition from SK Hynix in high-bandwidth memory used in advanced AI systems. However, its larger shareholder return program could support the stock while management allocates excess cash. The remaining payout structure will determine how much capital ultimately reaches shareholders through dividends, buybacks, and cancellations. The late-October dividend decision and the January 2027 board meeting, together with SK Hynix's buyback execution and planned share cancellations, mark the next scheduled steps in how that capital is delivered.

Source: CoinCentral