SK Hynix shares surge 12 percent on accelerated 28.7 billion dollar buyback plan
SK Hynix shares jumped over 12 percent after the chipmaker accelerated a 28.7 billion dollar share repurchase program, signaling confidence in its long-term growth and lifting broader Asian technology equities.
SK Hynix shares surged more than 12 percent in Seoul following the announcement of an accelerated share repurchase and cancellation program. The chipmaker is fast-tracking a massive 40 trillion won, or 28.7 billion dollar, buyback initiative to return capital to investors.
The company also plans to expand shareholder returns to exceed 50 percent of cumulative free cash flow generated between 2025 and 2027. Peter Lee, an analyst at Citi, noted the aggressive capital return strategy reflects confidence in the mid- to long-term growth outlook despite memory sector headwinds. "We believe the initiative is expected to serve as a meaningful floor for the share price, providing tangible downside support in the near term," Lee said.
The aggressive buyback highlights management's commitment to shareholder value while the company navigates ongoing headwinds in the memory sector. It follows a major announcement earlier this month that SK Hynix will invest 54 trillion Korean won to build new memory chip manufacturing plants. This significant capital expenditure is directly driven by growing global demand for components crucial to artificial intelligence applications.
The positive corporate news helped lift broader Asian technology stocks, which were recovering from steep losses the previous trading day. Market sentiment across the region was further bolstered by a simultaneous rebound in U.S. equities. American stocks successfully snapped a three-day losing streak as yields on longer-dated U.S. Treasurys retreated from multi-year highs.
Gains were widespread across major Asian technology names as investors rotated back into the sector. In South Korea, Samsung Electronics rose 8.69 percent and Kakao climbed 4.41 percent.
Japanese markets also saw strong performance, with SoftBank Group advancing 3.79 percent and Nintendo gaining over 3 percent. Rakuten added 2.39 percent to its valuation. These broad movements highlight the heightened volatility in the sector, as South Korea's semiconductor-heavy market continues to whipsaw between steep losses and sharp gains.
